-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S4n/e62F/CAXFQUn/5VylIs8hj8tC5m6ChTaHIXJnzWUTndYjsAnV0wSi5kJoNAT kvQ3GNt5YkpzGUTpaHMMFQ== 0000005187-03-000063.txt : 20031022 0000005187-03-000063.hdr.sgml : 20031022 20031022064440 ACCESSION NUMBER: 0000005187-03-000063 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031022 ITEM INFORMATION: ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20031022 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WYETH CENTRAL INDEX KEY: 0000005187 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 132526821 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-01225 FILM NUMBER: 03950757 BUSINESS ADDRESS: STREET 1: 5 GIRALDA FARMS CITY: MADISON STATE: NJ ZIP: 07940 BUSINESS PHONE: 9736605000 MAIL ADDRESS: STREET 1: 5 GIRALDA FARMS CITY: MADISON STATE: NJ ZIP: 07940 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN HOME PRODUCTS CORP DATE OF NAME CHANGE: 20020308 FORMER COMPANY: FORMER CONFORMED NAME: AMERICAN HOME PRODUCTS CORP DATE OF NAME CHANGE: 19920703 8-K 1 earnth8k.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (Date of earliest event reported): October 22, 2003 Wyeth (Exact name of registrant as specified in its charter) Delaware 1-1225 13-2526821 (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) Five Giralda Farms, Madison, New Jersey 07940 (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 973-660-5000 Item 9. Regulation FD Disclosure Attached hereto as Exhibit 99.1 and incorporated to this Item 9 by reference is information regarding Wyeth's diet drug litigation which is being posted on the Investor Relations section of Wyeth's internet website (www.wyeth.com). The information included in this Item 9 and in Exhibit 99.1 hereto is not being filed but rather is being furnished under Regulation FD. Item 12. Results of Operations and Financial Condition Attached hereto as Exhibit 99.2 and incorporated to this Item 12 by reference is Wyeth's Earnings Results for the 2003 Third Quarter. The information included in this Item 12 and in Exhibit 99.2 hereto is not being filed but rather is being furnished under Regulation FD. This Current Report on Form 8-K is being posted on the Investor Relations section of Wyeth's internet website (www.wyeth.com). Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. WYETH By: /s/ Paul J. Jones Paul J. Jones Vice President and Controller (Duly Authorized Signatory) Dated: October 22, 2003 EX-99.1 3 diet.txt UPDATE ON DIET DRUG LITIGATION Exhibit 99.1 Wyeth Provides Update on Diet Drug Litigation The Company regularly updates information on the status of its diet drug litigation in connection with its quarterly filings with the Securities and Exchange Commission. If the Company's Form 10-Q were being filed today, the following information would be included: The Company is involved in various legal proceedings, including product liability and environmental matters of a nature considered normal to its business. It is the Company's policy to accrue for amounts related to these legal matters if it is probable that a liability has been incurred and an amount is reasonably estimable. The nationwide class action settlement to resolve litigation brought against the Company regarding use of the diet drugs PONDIMIN (which in combination with phentermine, a product that was not manufactured, distributed or sold by the Company, was commonly referred to as "fen-phen") or REDUX received final judicial approval effective January 3, 2002. As previously reported, the number of individuals who have filed claims within the settlement that allege significant heart valve disease (known as "matrix" claims) has been higher than had been anticipated. The settlement agreement grants the Company access to claims data maintained by the settlement trust. Based on its review of that data, the Company understands that, as of September 24, 2003, the settlement trust had recorded approximately 108,000 matrix-level claim forms. Approximately 24,300 of these forms are so deficient, incomplete or duplicative of other forms filed by the same claimant that they are, in the Company's view, unlikely to result in a significant number of matrix claims to be processed further. The Company's current understanding of the status of the remaining approximately 83,700 forms, based on its analysis of data received from the settlement trust through September 24, 2003, is as follows. Approximately 10,300 of the matrix claims have been processed to completion, with those claims either paid (approx. 2,750 claims, with payments of $1.039 billion), denied (approx. 7,000) or withdrawn. Approximately 1,500 claims have begun the 100% audit process ordered in late 2002 by the federal court overseeing the national settlement. Approximately 25,550 claims allege conditions that, if true, would entitle the claimant to receive a matrix award; these claims have not yet entered the audit process. Another approximately 16,650 claims with similar allegations have been purportedly substantiated by physicians whose claims are now subject to the outcome of the trust's Integrity Program, discussed below. Approximately 29,400 claim forms do not currently contain sufficient information even to assert a matrix claim, although some of those claim forms could be made complete by the submission of additional information and could therefore become eligible to proceed to audit in the future. The remaining approximately 300 claims are currently in the data entry process and cannot be assessed at this time. In addition to the approximately 108,000 matrix claims filed as of September 24, 2003, additional matrix claims may be filed through 2015 by class members who develop a matrix condition in the future if they have registered with the settlement trust by May 3, 2003, and have demonstrated FDA+ regurgitation or mild mitral regurgitation on an echocardiogram conducted after diet drug use and obtained either outside of the settlement trust by January 3, 2003 or within the settlement trust's screening program. The Company's current understanding, based on data received from the settlement trust through September 24, 2003, is that audits have been completed on 820 of the approximately 1,500 claims that have begun the 100% audit process. Of these, 285 were found to be payable at the amount claimed and 16 were found to be payable at a lower amount than had been claimed. The remaining claims were found ineligible for a matrix payment, although the claimants may appeal that determination to the federal court overseeing the settlement. Because it remains unclear whether the claims audited to date are a representative sample of the claims that might proceed to audit, the Company cannot predict the ultimate outcome of the audit process. Both the volume and types of claims seeking matrix benefits received by the settlement trust to date differ materially from the epidemiological projections on which the court's approval of the settlement agreement was predicated. Based upon data received from the settlement trust, approximately 94% of the 25,550 matrix claimants who allege conditions that, if true, would entitle them to an award (and approximately 99% of the approximately 16,650 claims certified by physicians currently subject to the trust's Integrity Program) seek an award under Level II of the five-level settlement matrix. (Level II covers claims for moderate or severe mitral or aortic valve regurgitation with complicating factors; depending upon the claimant's age at the time of diagnosis, and assuming no factors are present that would place the claim on one of the settlement's reduced payment matrices, awards under Level II range from $192,111 to $643,500.) An ongoing investigation which the Company understands is being conducted by counsel for the settlement trust and discovery conducted to date by the Company in connection with certain Intermediate and Back-End opt out cases (brought by some of the same lawyers who have filed these Level II claims and supported by some of the same cardiologists who have certified the Level II claims) cast substantial doubt on the merits of many of these matrix claims and their eligibility for a matrix payment from the settlement trust. Therefore, in addition to the 100% audit process, the settlement trust has embarked upon an Integrity Program, which is designed to protect the Trust from paying illegitimate or fraudulent claims. Pursuant to the Integrity Program, the settlement trust has required additional information concerning matrix claims purportedly substantiated by thirteen identified physicians in order to determine whether to permit those claims to proceed to audit. Based upon data obtained from the trust, the Company believes that approximately 16,650 matrix claims were purportedly substantiated by the thirteen physicians currently covered by the Integrity Program. It is the Company's understanding that additional claims substantiated by additional physicians might be subjected to the same requirements of the Integrity Program in the future. As an initial step in the integrity review process, each of the identified physicians has been asked to complete a comprehensive questionnaire regarding each claim and the method by which the physician reached the conclusion that it was valid. The ultimate disposition of any or all claims that are subject to the Integrity Program is at this time uncertain. Counsel for certain claimants affected by the program recently challenged the trust's authority to implement the Integrity Program and to require completion of the questionnaire before determining whether to permit those claims to proceed to audit. While that motion was denied by the court, additional challenges to the Integrity Program are possible. The settlement trust has also adopted a program to prioritize the handling of those matrix claims that it believes are least likely to be illegitimate. Under the plan, claims under Levels III, IV and V will be processed and audited on an expedited basis. (Level III covers claims for heart valve disease requiring surgery to repair or replace the valve, or conditions of equal severity. Levels IV and V cover complications from, or more serious conditions than, heart valve surgery.) The policy will also prioritize the auditing of, inter alia, Level I claims, all claims filed by a claimant without counsel (i.e., on a pro se basis) and Level II claims substantiated by physicians who have attested to 20 or fewer matrix claims. Finally, the settlement trust has filed a suit alleging violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act against a Kansas City cardiologist who attested under oath to the validity of over 2,500 matrix claims. The suit alleges that the cardiologist intentionally engaged in a pattern of racketeering activity to defraud the settlement trust. The trust has indicated that one of the goals of the Integrity Program is to recoup funds from those entities that caused the trust to pay illegitimate claims. The Company continues to monitor the progress of the trust's audit process and its Integrity Program and has brought and will continue to bring to the attention of the trust and the court overseeing the settlement any additional irregularities that it uncovers in the matrix claim process. Even if substantial progress is made by the trust, through its Integrity Program or other means, in reducing the number of illegitimate matrix claims, a significant number of the claims which proceed to audit might be interpreted as satisfying the matrix eligibility criteria, notwithstanding the possibility that the claimants may not in fact have serious heart valve disease. If so, matrix claims found eligible for payment after audit may exceed the $3.75 billion cap of the settlement fund. Should the settlement fund be exhausted, most of the matrix claimants who filed their matrix claim on or before May 3, 2003 and who pass the audit process at a time when there are insufficient funds to pay their claim may pursue the opt out right created by the Sixth Amendment to the settlement agreement, unless the Company first elects, in its sole discretion, to pay the matrix benefit after audit. Sixth Amendment opt out claimants may then sue the Company in the tort system, subject to the settlement's limitations on such claims. In addition to the limitations on all Intermediate and Back-End opt outs (such as the prohibition on seeking punitive damages and the requirement that the claimant sue only on the valve condition that gave rise to the claim), a Sixth Amendment opt out may not sue any defendant other than the Company and may not join his or her claim with the claim of any other opt out. The Company cannot predict the ultimate number of individuals who might be in a position to elect a Sixth Amendment opt out or who may in fact elect to do so, but that number could be substantial. If the settlement fund were to be exhausted, some individuals who registered to participate in the settlement by May 3, 2003, who had demonstrated either FDA+ level regurgitation or mild mitral regurgitation on an echocardiogram completed after diet drug use and conducted either outside of the settlement prior to January 3, 2003 or within the settlement's screening program, and who subsequently develop (at any time before 2015) a valvular condition that would qualify for a matrix payment might elect to pursue a Back-End opt out. Such individuals may pursue a Back-End opt out within 120 days of the date on which they first discover or should have discovered their matrix condition. The Company cannot predict the ultimate number of individuals who may be in a position to elect a Back-End opt out or who may in fact elect to do so, but that number could also be substantial. The Company's current understanding is that approximately 76,000 Intermediate opt out forms were submitted by May 3, 2003, the applicable deadline for most class members (other than qualified class members receiving echocardiograms through the settlement trust after January 3, 2003, who may exercise intermediate opt out rights within 120 days after the date of their echocardiogram). The number of Back-End opt out forms received as of the 2003 Third Quarter is estimated to be approximately 20,000, although certain additional class members may elect to exercise Back-End opt out rights in the future (under the same procedure as described above) even if the settlement fund is not exhausted. After eliminating forms that are duplicative of other filings, forms that are filed on behalf of individuals who have already either received payments from the settlement trust or settlements from the Company, and forms that are otherwise invalid on their face, it appears that approximately 78,000 individuals have filed Intermediate or Back-End opt out forms as of the 2003 Third Quarter. Purported Intermediate or Back-End opt outs (as well as Sixth Amendment opt outs) who meet the settlement's medical eligibility requirements may pursue lawsuits against the Company, but must prove all elements of their claims - including liability, causation and damages - without relying on verdicts, judgments or factual findings made in other lawsuits. They also may not seek or recover punitive, exemplary or multiple damages and may sue only for the valvular condition giving rise to their opt out right. To effectuate these provisions of the settlement, the federal court overseeing the settlement has issued orders limiting the evidence that may be used by plaintiffs in such cases. Those orders, however, are being challenged on appeal and the Company cannot predict the outcome of those appeals. In addition to the specific matters discussed herein, the federal court overseeing the national settlement has issued a number of rulings concerning the processing of matrix claims and the rights of, and limitations placed on, class members by the terms of the settlement. Several of those rulings are being challenged on appeal. Certain class members have also filed a number of motions attacking both the binding effect of the settlement and the administration of the settlement trust. While most of those motions have been denied, one remains pending and several of those that have been denied are being challenged on appeal. The Company cannot predict the outcome of any of these appeals. To date, approximately 25,000 individuals who have filed Intermediate or Back-End opt out forms have filed lawsuits, most of which have been filed in the past few months. The claims of most of these 25,000 plaintiffs are now pending in federal courts and have been or will be transferred for pretrial proceedings to the federal court overseeing the national settlement. The Company expects to challenge vigorously all Intermediate and Back-End opt out claims of questionable validity or medical eligibility and the number of such claims that meet the settlement's opt out criteria will not be known for some time. As a result, the Company cannot predict the ultimate number of purported Intermediate or Back-End opt outs that will satisfy the settlement's opt out requirements, but that number could be substantial. As to those opt outs who are found eligible to pursue a lawsuit, the Company also intends vigorously to defend these cases on their merits. The Company has resolved the claims of all but a small percentage of the "initial" opt outs (i.e., those individuals who exercised their right to opt out of the settlement class) and continues to work toward resolving the rest. It also continues to work toward resolving the claims of individuals who allege that they have developed Primary Pulmonary Hypertension (PPH) as a result of their use of the diet drugs. The Company intends vigorously to defend those initial opt out and PPH cases that cannot be resolved prior to trial. During the 2003 Third Quarter, the Company increased its reserves in connection with the REDUX and PONDIMIN diet drug matters by $2.0 billion, bringing the total of the charges taken to date to $16.6 billion. Through September 30, 2003, payments into the national settlement funds, individual settlement payments, legal fees and other costs totaling $13.0 billion were paid and applied against the litigation accrual. At September 30, 2003, and including the most recent increase, $3.6 billion of the litigation accrual remained. The balance remaining represents management's best estimate of the minimum aggregate amount anticipated to cover payments in connection with the settlement trust up to its cap, initial opt outs, PPH claims, Intermediate, Back-End or Sixth Amendment opt outs (collectively, the "downstream" opt outs), and the Company's legal fees related to the diet drug litigation. Due to its inability to estimate the ultimate number of valid downstream opt outs, and the merits and value of their claims, as well as the inherent uncertainty surrounding any litigation, the Company is unable to estimate the amount of any additional financial exposure represented by the downstream opt out litigation. However, the amount of financial exposure beyond that which has been recorded could be significant. The Company intends to defend itself vigorously and believes it can marshal significant resources and legal defenses to limit its ultimate liability in the diet drug litigation. However, in light of the circumstances discussed above, including the unknown number of valid matrix claims and the unknown number and merits of valid downstream opt outs, it is not possible to predict the ultimate liability of the Company in connection with its diet drug legal proceedings. It is therefore not possible to predict whether, and if so when, such proceedings will have a material adverse effect on the Company's financial condition, results of operations and/or cash flows and whether cash flows from operating activities and existing and prospective financing resources will be adequate to fund the Company's operations, pay all liabilities related to the diet drug litigation, pay dividends, maintain the ongoing programs of capital expenditures, and repay both the principal and interest on its outstanding obligations without the disposition of significant strategic core assets and/or reductions in certain cash outflows. EX-99.2 4 press3rd.txt EARNINGS PRESS RELEASE 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: 3 - $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 $290 million. 4 Segment Information - ------------------- The following table sets forth worldwide net revenue by operating segment together with the percentage changes from the comparable period in the prior year: Three Months Nine Months Ended 9/30/03 Ended 9/30/03 -------------------- -------------------- Operating Segment ($ 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, 5 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. 6 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. 7 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 8 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. -----END PRIVACY-ENHANCED MESSAGE-----