Slide 1: First Quarter 2009 Earnings Teleconference
First Quarter 2009 Earnings Teleconference April 28, 2009
Slide 2: Introduction
First Quarter 2009 Earnings Teleconference Introduction Chuck Triano Senior Vice President, Investor Relations
Slide 3: Forward-Looking Statements and Non-GAAP Financial Information
Forward-Looking Statements and Non-GAAP Financial Information ' Our discussions during this conference call will include forward- looking statements. Actual results could differ materially from those projected in the forward-looking statements. The factors that could cause actual results to differ
Slide 4: Opening Remarks
First Quarter 2009 Earnings Teleconference Opening Remarks Jeff Kindler Chairman & Chief Executive Officer
Slide 5: Planned Business Structure To Provide Flexibility & Accountability
First-Quarter 2009 Planned Business Structure To Provide Flexibility & Accountability ' BioPharmaceuticals Specialty Primary Established Emerging Care & Oncology Care Products Markets Vaccines Diversified Consumer Nutritional Animal Health Capsugel Health Health PharmaTherapeutics Business Units and
Slide 6: Commercial Operations Structure Following Wyeth Closing
First-Quarter 2009 Commercial Operations Structure Following Wyeth Closing ' BioPharmaceuticals Diversified Businesses Ian Read, Group President Cavan Redmond, Group President Specialty Primary Emerging Established Animal Consumer Care and Oncology Capsugel Nutritional Care Markets Products Health H
Slide 7: A Broad, Diverse, High-Value Pipeline
First-Quarter 2009 A Broad, Diverse, High-Value Pipeline ' Discovery Projects Phase 1 Phase 2 Phase 3 In Reg. Total 100 40 33 25 2 21 programs advanced since September 2008 Of these, 12 are in high-priority disease areas, including diabetes, cancer and Alzheimer’s disease Achieved goal to adva
Slide 8: Biopharmaceutical Research Following Wyeth Closing
First-Quarter 2009 Biopharmaceutical Research Following Wyeth Closing ' PharmaTherapeutics BioTherapeutics Research Group Research Group (Small Molecule) (Large Molecule/Vaccines) Dr. Martin Mackay, President Dr. Mikael Dolsten, President Two Research Groups delivering positive Proofs of Concept f
Slide 9: First Quarter 2009 Earnings Teleconference
First Quarter 2009 Earnings Teleconference Jeff Kindler Chairman & Chief Executive Officer
Slide 10: Financial Review
First Quarter 2009 Earnings Teleconference Financial Review Frank D’Amelio Senior Vice President & Chief Financial Officer
Slide 11: Income Statement Highlights
First-Quarter 2009 Income Statement Highlights ' ($ Millions, Except Per-Share Amounts) First Quarter 2009 2008 Change Reported Revenues $10,867 $11,848 (8%) Reported Net Income(1) 2,729 2,784 (2%) Reported Diluted EPS(1) 0.40 0.41 (2%) Adjusted Income(2) 3,667 4,099 (11%) Adjusted Diluted EPS(2) 0.
Slide 12: Certain Significant Items
First-Quarter 2009 Certain Significant Items ' ($ Millions, on a Pre-Tax Basis) First Quarter 2009 2008 Restructuring Charges $157 $177 Implementation Costs 174 357 Total Cost-Reduction Initiatives 331 534 Certain Legal Matters 132 -- Other 10 7 Total Certain Significant Items $473 $541 Charges Rela
Slide 13: Quarterly Adjusted Income Components
First-Quarter 2009 Quarterly Adjusted Income(1) Components ' ($ Millions, Except Per-Share Amounts) First Quarter 2009 2008 Change Revenues(1) $10,845 $11,796 (8%) Cost of Sales(1) 1,314 1,800 (27%) SI&A Expenses(1) 2,833 3,409 (17%) R&D Expenses(1) 1,665 1,638 2% Adjusted Total Costs(1) 5,812 6,847
Slide 14: Factors Impacting Adjusted Income Components
First-Quarter 2009 Factors Impacting Adjusted Income(1) Components ' Compared with the Year-Ago Quarter ($ Millions, Except Per-Share Amounts) First Quarter Adjusted(1) Operational Impact Fx Impact Revenues(1) $10,845 ($323) (3%) ($627) (5%) Cost of Sales(1) 1,314 (148) (8%) (337) (19%) SI&A Expense
Slide 15: Business Revenues
First-Quarter 2009 Business Revenues ' ($ Millions) First Quarter Fx Operational 2009 2008 Change Impact Impact Primary Care $5,322 $5,788 (8%) (4%) (4%) Specialty Care 1,463 1,362 7% (3%) 10% Oncology 350 421 (17%) (6%) (11%) Established Products 1,615 1,841 (12%) (2%) (10%) Emerging Markets 1,352
Slide 16: Quarterly Select Product Highlights
First-Quarter 2009 Quarterly Select Product Highlights ' ($ Millions) Worldwide U.S. International 2009 Change 2009 Change 2009 Change Key Products Lipitor $2,721 (13%) $1,452 (17%) $1,269 (9%) Lyrica 684 17% 418 19% 266 15% Celebrex 564 (8%) 419 (10%) 145 (1%) Norvasc 481 (6%) 19 * 462 (11%) Viagra
Slide 17: Progress On Cost Reduction Initiatives
First-Quarter 2009 Progress On Cost Reduction Initiatives ' Period Cost Reduction Cost reductions totaling FY2007 $600 million(1) approximately $330 million recognized in Q109 Q108 170 million(1) In addition, realized $165 million in savings from certain insurance Q208 465 million(1) recoveries
Slide 18: 2009 Financial Guidance
First-Quarter 2009 2009 Financial Guidance ' Guidance(3), (5) Reported Revenues $44.0 to $46.0 Billion Adjusted Cost of Sales(2) as a 14.5% to 15.5% Percentage of Revenues Adjusted SI&A Expenses(2) $13.5 to $14.0 Billion Adjusted R&D Expenses(2) $7.1 to $7.5 Billion Adjusted Other Income(2) $500 to
Slide 19: Pending Wyeth Acquisition Planning Update
First-Quarter 2009 Pending Wyeth Acquisition Planning Update ' Progress to Date Work to be Completed Syndicated bridge loan to Continue to execute on 2009 goals 34 banks Obtain regulatory approvals Finalized credit agreements – FTC, EU, China, etc. Filed HSR notification SEC to declare t
Slide 20: Key Takeaways
First-Quarter 2009 Key Takeaways ' Results consistent with our expectations – Steady growth from Lyrica, Zyvox, and Sutent – Chantix label changes and Lipitor competition continue to impact performance – Foreign exchange had a significant adverse impact on results Reductions of approximately $33
Slide 21: Q&A Session
First Quarter 2009 Earnings Teleconference Q&A Session