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How the future looks for some industry powers.

NEW YORK -- Here is a brief rundown of the outlook for some of the major drug companies based on the views of analysts at Standard & Poor's, Argus Research Co. and other Wall Street firms.

Abbott Laboratories

The company is a leading player in several growing health care markets, including prescription drugs, infant and adult nutritionals, diagnostics, and medical devices, with above-average prospects for 2008.

Abbott markets a wide array of therapeutics. Major products include Humira to treat rheumatoid arthritis and psoriatic arthritis; Biaxin, a major class of a broad-spectrum antibiotics used for a broad variety of infections, including hpylori, associated with duodenal ulcers; Depakote, a leading antiepileptic and bipolar disorder drug; Kaletra, an anti-HIV medication; and the cholesterol treatment TriCor.

Analysts believe that Abbott has a relatively strong new-product pipeline, with potentially significant launches in both the medical device and pharmaceutical areas.


The world's largest biotechnology company makes and markets five of the world's bestselling biotech drugs.

They are Epogen for anemia associated with the kidney; Neupogen for cancer patients; Aranesp for anemia associated with renal failure; Neulasta, to protect chemotherapy patients from infection; and Enbrel for rheumatoid arthritis.

The company is facing difficulties because in 2007 Phase III trial data showed a higher rate of death when using Aranesp in treating anemia of cancer (AoC) not associated with chemotherapy, an off-label prescribed use. Medicare removed AoC as a reimbursable use for Aranesp. During 2007 several studies emerged suggesting that Aranesp may foster tumor growth in several cancers dosed at or above 12 g/dl. Some analysts think that Medicare will not reconsider its ruling.

Despite these problems, Amgen has some impressive new products that will help sales, and analysts believe that the company's longer-term outlook is very promising.


The supplier, whose corporate headquarters are in the United Kingdom and whose research base is in Sweden, is one of the world's leading drug companies.

Analysts project sales in 2008 to grow about 4%, reflecting the full-year inclusion of MedImmune (acquired in June 2007), as well as volume gains in established lines.

Key growth drivers should be Seroquel antipsychotic (assuming no generic erosion); the cholesterol-lowering agent Crestor, lifted by favorable clinical studies; and Symbicort respiratory therapy, helped by a new metered-dose inhaler formulation.

However, analysts see competitive pressures in the Nexium line, as well as generics erosion in such older drugs as Losec and Toprol XL.

The acquisition of MedImmune has expanded the company's base in vaccines and biologics, and analysts think it will also deliver important long-term synergies.


Analysts are generally upbeat to very optimistic about BD's prospects to outperform other companies in the health care-equipment industry.

The company manufactures and sells medical supplies, devices, lab equipment and diagnostic products used by health care institutions, life science researchers, clinical laboratories, industry and the general public.

Analysts expect that in 2008 the company will achieve high single-digit growth across the medical, diagnostics and biosciences divisions.

Many believe the 2006 acquisitions of Tripath Imaging and GeneOhm Sciences improved the company's position in the diagnostics markets, and they see significant growth opportunities in the detection of bacterial (including drug-resistant) infections and cervical cancer.

Bristol-Myers Squibb

The company is a major global drug maker, offering a wide range of prescription drugs.

In recent years Bristol-Myers has divested its noncore beauty care, orthopedic devices, imaging products and cancer drug distribution businesses, and its 2008 prospects are favorable.

The company's largest-selling drug is Plavix, a platelet-aggregation inhibitor for the prevention of stroke, heart attack and vascular disease. Plavix is produced through a joint venture with French drug maker sanofiaventis. Other cardiovasculars include Avapro/Avahde, an angiotensin II receptor blocker for hypertension, Pravachol anti-cholesterol and the Coumadin blood thinning agent.

Principal anticancer drugs are Erbitux, Taxol and Sprycel. The company's principal anti-infective drugs are such HIV/AIDS treatments as Reyataz, Sustiva and Baraclude.

Bristol-Myers also offers Cefzil, Tequin, Maxipime and other antibiotics. Central nervous system agents include Abilify, an antipsychotic; Sinemet for Parkinson's disease; and various other drugs. Orencia, a new treatment for rheumatoid arthritis, was approved in December 2005.

The company has more than 50 drugs in development, covering new treatments for psychiatric disorders, Alzheimer's disease, arteriosclerosis and thrombosis, cancer, diabetes, hepatitis, HIV/AIDS, obesity, rheumatoid arthritis, and solid organ transplantation.

Eli Lily

Based in Indianapolis, the company is expected to see its revenues rise 8% in 2008. Lilly's products include Cymbalta to treat depression and pain, Zyprexa for schizophrenia, Actos for diabetes, Evista and Forteo for osteoporosis, and Gemzar and Alimta for cancer and many other conditions.

Sales of Cymbalta antidepressant should advance about 30% in 2008, boosted by expanded direct-to-consumer advertising, new indications and expansion in foreign markets.

Analysts also foresee robust growth in such drugs as Cialis, for treating erectile dysfunction; the Byetta diabetes treatment; and Humalog human insulin. Analysts look for these gains to more than offset likely flat sales of the antipsychotic Zyprexa.

Analysts also see much potential in the pipeline, with a total of 30 new chemical entities having started clinical trials in 2007 and 2008. Despite recent mixed clinical results, analysts still see much promise in Lily's Prasugre] anticlotting drug.

Forest Laboratories

The company develops and makes branded and generic ethical drug products, sold primarily in the United States, Puerto Rico, and Western and Eastern Europe.

Analysts expect revenues in the upcoming year to rise 7%. Despite heightened competitive pressures, analysts still see modest growth for Lexapro antidepressant sales, reflecting their view of that drug's efficacy and side effect advantages, as well as higher prices. Food and Drug Administration clearance to market Lexapro for adolescent depression would also boost volume.

Analysts look for sales of the Namenda Alzheimer's drug to increase in the low double digits percentage-wise, lifted by projected greater acceptance in the medical community. A modest contribution is expected from the recently launched Bystolic beta-blocker antihypertensive drug.

Despite recent setbacks, analysts believe Forest has a fairly robust research and development pipeline. Key R&D projects include milnacipran, a pain drug being codeveloped with Cypress Bioscience; RGH-188, an atypical antipsychotic; and aclidinium, a treatment for chronic obstructive pulmonary disease. Studies are also being conducted for an adolescent depression indication for Lexapro, and a congestive heart failure indication for Bystolic.

The company faces problems after patents expire on Lexapro and Namenda in 2012.


Based in San Francisco, Genentech is the world's second-largest biotech company. Switzerland's Roche Holding AG has a controlling interest, with 55.8 % of the common shares.

Genentech discovers, develops and markets both protein-based biotherapeutics and small-molecule therapeutics. It has R&D programs focused on oncology, immunology, vascular medicine, and tissue growth and repair.

The core of its current business is oncology, including the key products Herceptin, Rituxan, Avastin (recently approved to treat breast cancer), Lucentis (for age-related macular degeneration) and Tarceva.

Other products include Activase and TNKase (clot-busters to treat acute heart attacks and strokes), the growth hormone Nutropin, and the pulmonary products Pulmozyme and Xolair.

Analysts believe the company has promising prospects, and many rate it as a "buy."


Based in London, GSK ranks as the world's second-largest pharmaceutical company.

The supplier's leading products are Avandia for diabetes, Advair/Seretide for asthma and COPD, Lamictal for epilepsy, Valtrex for herpes and a range of vaccines. In addition, the company has an active development program in vaccines, oncology and musculoskeletal, anti-inflammatory and gastrointestinal therapies.

The consumer health care segment includes over-the-counter medicines, oral care and nutritionals. Key brands include Nicorette, Sensodyne and Panadol.

Analysts think GSK has one of the strongest R&D positions in the global pharmaceutical industry. As of September 2007 the company's pipeline consisted of some 130 pharmaceutical and vaccine products in clinical development, including over 45 in Phase III, in registration or approved.

Key compounds include Cervarix vaccine for cervical cancer, Promacta oral platelet growth factor, Synflorix flu vaccine, Treximet novel treatment for migraine, Entereg for bowel resection patients, Arixtra for acute coronary syndrome, and ambrisentan for pulmonary arterial syndrome factor.

Johnson & Johnson

An analyst favorite, J&J ranks as one of the world's largest and most diversified health care companies, with products spanning across the pharmaceutical and medical device industries.

In December 2006 J&J purchased the consumer products unit of Pfizer Inc. for $16.6 billion, which added such brands as Listerine, Nicorette, Visine, Neosporin and Lubriderm to its own brands, which include a number of products under the Ortho-McNeil name and the brands Band-Aid, Tylenol and Johnson (baby products).

In February 2007 J&J consummated its acquisition of Conor Medsystems, a firm that has developed an innovative controlled drug delivery technology that is being incorporated for J&J's CoStar cobalt chromium coronary stent.

The company also offers Risperdal and Risperdal Consta for the treatment of schizophrenia; Procrit, which stimulates red blood cell production; Remicade for the treatment of Crohn's disease, ankylosing spondylitis, psoriatic arthritis, ulcerative colitis, chronic severe plaque psoriasis and rheumatoid arthritis; Topamax, an antiepileptic and migraine prevention treatment; Levaquin and Floxin anti-infective products; Duragesic for chronic pain; Ortho Evra contraceptive patch and Ortho Tri-Cyclen Lo oral contraceptive; Concerta for treating hyperactivity disorder; and Natrecor for decompensated congestive heart failure.


Merck & Co.'s sales are expected to be flat in 2008.

Its largest products include Singulair (for asthma and allergies), Fosamax (for osteoporosis), Januvia (for diabetes), Cozaar and Hyzaar (for hypertension), and a range of vaccines.

The company participates in the sales of Zetia and Vytorin (for high cholesterol) through a joint venture with Schering-Plough Corp.

Recently released results of the Enhance climcal study show that patients treated with Vytorin had no advantage in preventing the buildup of plaque in their carotid arteries, compared with those treated with Zocor alone (now generically available as simvastatin).

Merck has taken steps to improve operations through restructuring, and some significant new products are being launched globally, including Gardasil (for the prevention of cervical cancer) and Januvia/ Janumet (for diabetes), with others on the horizon.

The company is weathering generic drug competition for Zocor, which is dampening earnings growth, and it lost U.S. patent protection for Fosamax in February and for Trusopt/ Cosopt in October. Still, the company's earnings are projected to expand through cost management and new product introductions.

On the plus side, analysts still think that Merck has an impressive R&D pipeline, which comprises some 49 drugs and vaccines for heart disease, cancer, osteoporosis, diabetes and other conditions.

Mylan Laboratories

The company develops, manufactures and markets generic pharmaceutical products. Through the recent acquisition of the Merck KGaA generics business, the company's portfolio includes about 570 generic medicines in 90 countries as well as a U.S. branded pharmaceuticals business, Dey LP.

Analysts say Mylan is positioning itself to benefit from increased worldwide demand for generic pharmaceuticals through its recent acquisitions, including a majority stake in the Indian generics firm Matrix. Matrix provides Mylan with lowcost manufacturing, while the Merck operation expands Mylan's marketing and distribution organization internationally.

The acquisitions bring opportunity, although Mylan will also face the challenge of realizing the anticipated synergies.

Mylan has about 60 abbreviated new drug applications (ANDAs) pending final approval at the FDA, representing branded sales of about $49 billion. Among these products Mylan has about 10 potential "first to file" Paragraph 4 opportunities pending.

During 2007 Mylan filed 24 ANDAs and expects to increase that number to 60 in 2008 by leveraging the R&D resources of Matrix but excluding any contribution from Merck Generics.


Formed through the 1996 merger of Swiss drug makers Ciba-Geigy and Sandoz, Novartis now ranks among the world's 10 leading pharmaceutical companies.

Analysts expect revenues to rise 5% in 2008. Although patent expiration losses are likely to restrict drug sales during the first half, analysts see full-year growth for pharmaceuticals lifted by gains in Diovan, Exforge and Tekturna antihypertensives, as well as in such anticancer brands as Gleevec, Zometa and Femara.

Higher sales are also seen for such newer products as Lucentis for macular degeneration and Aclasta for osteoporosis.

Analysts also project gains in generics and vaccines, as well as in continuing consumer health care businesses.

On the downside, analysts see lower sales of such off-patent products as Lotrel, Lamisil and Trileptal.

Analysts also regard the Sandoz generics and consumer health businesses, which have recently been strong performers, as balances to the more challenging prescription drug business.


The world's largest pharmaceutical company and producer of a wide range of drugs across a broad therapeutic spectrum continues to take aggressive action to remain leader of the pack.

Analysts believe the company's size and financial resources empower it with a greater ability to make acquisitions and form strategic alliances with smaller pharmaceutical and biotechnology companies.

Principal cardiovasculars include Lipitor, the world's largest-selling cholesterol-lowering agent as well as the biggest drug in any therapeutic category in 2007, and such antihypertensives as off-patent Norvasc, and Caduet, a combination of Lipitor and Norvsasc.

Infectious disease drugs consist of Zyvox, a treatment for severe bacterial infections, and Vfend, an antifungal. Key central nervous system medicines include Lyrica, a treatment for nerve pain and epileptic seizures, and Geodon, an antipsychotic.

Other drugs sold include Celebrex COX-2 inhibitor for arthritis and pain; Viagra for male erectile dysfunction; Zyrtec, an antihistamine; Xalatan/Xalcom, for glaucoma; Detrol and LA/ Detrol, treatments for incontinence; Chantix for smoking cessation; and anticancer agents.

In 2007 Pfizer's pipeline consisted of some 99 novel compounds or potential new molecular entities (NMEs), and product enhancement projects. Of the total, 11 were in registration or Phase III clinical trials, and the balance were in Phase I and II.

An estimated 25% of Pfizer's discovery and development activities involve external partnerships.

Key new products are Sutent for cancer, Chantix for smoking cessation, as well as novel treatments for AIDS, obesity, arthritis, heart disease and cancer.

With the company facing the loss of patent exclusivity on one-third of its pharmaceutical revenues and with the loss of the potential blockbuster, torcetrapib, from its pipeline, Pfizer has accelerated its restructuring efforts. Those initiatives should help Pfizer remain on track to realize shareholder value during its current transition period, as it introduces its next generation of products.

At the same time, the planned reallocation of resources to R&D and the acquisition of external business opportunities should enhance the company's future pipeline.

Over the 2004 to 2008 period Pfizer will lose patent exclusivity on Zoloft, Zithromax, Zyrtec, Camptosar and Norvasc. In 2011 the company's largest product, Lipitor, will also lose patent exclusivity.


The company is a global leader in treatments for hepatitis C with its PEG-Intron, a onceweekly alpha interferon, combined with the Rebetol antiviral agent.

In the anti-inflammatory area, Schering offers Remicade, a TNF-alpha treatment for rheumatoid arthritis and Crohn's disease. Other important products are Temodar, a treatment for brain tumors; Integrilin for cardiovascular problems; Avelox, a treatment for bacterial infections; Intron A for cancer and viral infections; Subutex for opiate dependence; Caelyx for skin cancer; Cipro, an antibiotic; and Elocon for inflammatory skin conditions.

A longtime leader in the U.S. respiratory/allergy market, Schering's most important prescription drugs in that area are Nasonex corticosteroid nasal spray and Clarinex/Aerius nonsedating antihistamine. Other important allergy/respiratory drugs include Asmanex and Foradil.

Consumer health care products largely comprise O-T-C Claritin. Other products in this division include such medications as Afrin nasal spray, ChlorTrimeton allergy tablets, Coricidin and Drixoral cold remedies, Gyne-Lotrimin for vaginal yeast infections, foot care items sold under the Dr. Scholl's and other names, and Coppertone and other sun care products.

Teva Pharmaceutical

The Israel-based maker of ge neric drugs and pharmaceutical raw materials ranks among the world's largest generic drug companies and is an analysts' favorite. In addition, Teva Pharmaceutical Industries offers branded pharmaceutical products, bulk pharmaceutical chemicals and veterinary products.

Other growth drivers that analysts see are a recent account win in Germany, emerging-market penetration and continued strong sales growth of branded products, including Copaxone (for multiple sclerosis), which also benefits from a reduction in profit sharing; Azilect (for Parkinson's disease); and respiratory products.

Analysts see demand for generic drugs continuing to rise strongly, as the U.S. and other countries seek to limit increases in drug spending.

With the largest generic drug portfolio among peers, and 160 ANDAs (generic drug filings) awaiting FDA clearance as of February 7, analysts think Teva will continue to gain market share via the offer of one-stop shopping.

Analysts like the company's growing product and geographic diversification, vertical integration and management execution, and they expect additional mergers and acquisitions with its healthy cash flow. A bright spot analysts see ahead is Teva's growing generic biotech business.


Based in New Jersey, Wyeth is a diversified pharmaceutical, consumer health care and animal health products company.

Its largest business is pharmaceuticals, and its leading products include therapies for depression and anxiety (Effexor), gastrointestinal disorders (Protonix), infections (Zosyn, Tazocin, Tygacil), autoimmune diseases (Enbrel), vaccines (Prevnar) and women's health care products (Premarin/PremPro). Key brands in the consumer health care group are Advil and Centrum.

Protonix now faces competition from three generics in the U.S. market. Wyeth launched its own generic version of Protonix in January, after negotiations with Teva and Sun Pharmaceuticals did not reach a settlement agreement regarding the product's patent.

Analysts also see generic challenges to Effexor and Zosyn this year as well. However, analysts expect continued strength in Prevnar pediatric vaccine and Enbrel anti-inflammatory agent. Analysts also see greater contributions from such new drugs as Tygacil antibiotic and Torisel anticancer agent.

Sales of animal health and consumer products may show modest gains.
Major publicly held pharmaceutical companies
                                    Sales                  income

                               2007          2006            %
                             (add 000)    (add 000)        change

Abbott Labs (12/31) (1)    $25,914,238   $22,476,322       + 15.3
Allergan (12/31) (2)         3,938,900     3,063,300       + 28.6
Amgen (12/31) (3)           14,771,000    14,268,000        + 3.5
AstraZeneca (12/31) (4)     29,559,000    26,475,000       + 11.6
Becton Dickinson             6,359,708     5,738,017       + 10.8
  (9/30) (5)
Bristol-Myers               19,348,000    17,256,000       + 12.1
  Squibb (12/31) (6)
Eli Lilly (12/31) (7)       18,633,500    15,691,000       + 18.8
Genentech (12/31)           11,724,000     9,284,000       + 26.3
GlaxoSmithKline             45,432,000    42,966,000        + 5.7
  (12/31) (8)
Johnson & Johnson           61,095,000    53,324,000       + 14.6
  (12/31) (9)
Merck (12/31) (10)          24,197,700    22,636,000        + 6.9
Novartis (12/31) (11)       38,072,000    34,393,000       + 10.7
Pfizer (12/31) (12)         48,613,000    48,371,000        + 0.5
Schering-Plough             12,690,000    10,594,000       + 19.8
  (12/31) (13)
Teva Pharmaceuticals         9,408,000     8,408,000       + 11.9
  (12/31) (14)
Wyeth (12/31) (15)          22,399,798    20,350,655       + 10.1

                                        Net income

                               2007          2006          %
                             (add 000)     (add 000)     change

Abbott Labs (12/31) (1)     $3,606,314    $1,716,755    + 110.1
Allergan (12/31) (2)           501,000     (127,400)        N/A
Amgen (12/31) (3)            3,166,000     2,950,000      + 7.3
AstraZeneca (12/31) (4)      5,627,000     6,063,000      - 7.2
Becton Dickinson               856,167       815,110      + 5.0
  (9/30) (5)
Bristol-Myers                1,968,000     1,422,000     + 38.4
  Squibb (12/31) (6)
Eli Lilly (12/31) (7)        2,953,000     2,662,700     + 10.9
Genentech (12/31)            2,769,000     2,113,000     + 31.0
GlaxoSmithKline             10,619,000    10,172,000      + 4.4
  (12/31) (8)
Johnson & Johnson           10,576,000    11,053,000      - 4.3
  (12/31) (9)
Merck (12/31) (10)           3,275,400     4,433,800     - 26.1
Novartis (12/31) (11)        6,540,000     6,825,000      - 4.2
Pfizer (12/31) (12)          8,367,000    11,024,000     - 24.1
Schering-Plough            (1,473,000)     1,143,000        N/A
  (12/31) (13)
Teva Pharmaceuticals         1,952,000       546,000    + 257.5
  (12/31) (14)
Wyeth (12/31) (15)           4,615,960     4,196,706     + 10.0

                                      Net margin

                                  2007          2006

Abbott Labs (12/31) (1)           13.9           7.6
Allergan (12/31) (2)              12.7           N/A
Amgen (12/31) (3)                 21.4          20.7
AstraZeneca (12/31) (4)           19.0          22.9
Becton Dickinson                  13.5          14.2
  (9/30) (5)
Bristol-Myers                     10.2           8.2
  Squibb (12/31) (6)
Eli Lilly (12/31) (7)             15.8          17.0
Genentech (12/31)                 23.6          22.8
GlaxoSmithKline                   23.4          23.7
  (12/31) (8)
Johnson & Johnson                 17.3          20.7
  (12/31) (9)
Merck (12/31) (10)                13.5          19.6
Novartis (12/31) (11)             17.2          19.8
Pfizer (12/31) (12)               17.2          22.8
Schering-Plough                   N/A           10.8
  (12/31) (13)
Teva Pharmaceuticals              20.7           6.5
  (12/31) (14)
Wyeth (12/31) (15)                20.6          20.6

(1) Abbott's earnings for 2007 include the following after-tax items:
$206 million in charges for acquisition integration; $92 million in
charges for a contract termination; $75 million for fair-value loss
adjustments, net of realized gains related to Boston Scientific stock;
$60 million for the write-down of Omnicef inventory; $17 million for
costs related to the terminated sale of the core laboratory
diagnostic business; and $373 million for cost-reduction initiatives
and other items. Earnings in the preceding year included the following
after-tax items: $1.7 billion for acquired in-process R&D, $141
million for cost-reduction initiatives, $220 million for integration
activities and other costs related to the Guidant acquisition, $74
million in asset impairment charges, $70 million for costs associated
with the discontinuation of a stent, $69 million for litigation costs
and $53 million for a contribution to the Abbott Fund. These items
were partially offset by a $70 million gain related to the Boston
Scientific stock purchase and a $132 million favorable adjustment
to tax expense.

(2) Allergen's 2007 results are from continuing operations, with
earnings reduced by a net of $171.9 million from various special
items. Results for 2007 also reflect the acquisitions of Groupe
Corneal Laboratoires, Inamed, Esprit and EndoArt. Including $1.7
million in losses from discontinued operations, the company had net
income of $499.3 million in 2007. The company's net loss in 2006
reflected a net of $674.6 million in special items. There were no
earnings or losses from discontinued operations in 2006

(3) Amgen's earnings for 2007 were reduced by a net of $1.64 billion
from various special items. Earnings in 2006 were reduced by a net
of $1.67 billion from various special items.

(4) AstraZeneca's earnings for 2007 reflect $966 million, before
taxes, in restructuring and synergy costs. Results include the
acquisition of Medimmune in June 2007.

(5) Becton Dickinson's results are from continuing operations, with
earnings for 2007 reflecting after-tax charges of $122.1 million for
in-process R&D. Earnings from continuing operations in 2006 reflected
$53.3 million in after-tax charges for in-process R&D, partially
offset by a $10.5 million gain from an insurance settlement.
Including $25.1 million in income from discontinued operations, the
company had net income of $881.3 million in 2007. This compares with
net income of $752.3 million in the preceding year, which included
$62.8 million in losses from discontinued operations.

(6) Bristol-Myers Squibb's results are from continuing operations,
with results reduced by a net of $767 million for various special
items, compared with a $551 million reduction in 2006. Results for
2007 reflect the acquisition of Adnexus Therapeutics. Including $197
million in earnings from discontinued operations, the company had
net income of $2.17 billion in 2007. This compares with net income
of $1.59 billion a year earlier, which included $163 million in
income from discontinued operations.

(7) Eli Lilly's earnings for 2007 reflected the following pretax
items: $745.6 million for acquired in-process R&D associated with
three acquisitions, $81.3 million for an adjustment to insurance
recoverables on product litigation, and $221.2 million in asset
impairment, restructuring and other special charges. Earnings for
2006 reflected the following pretax items: a $494.9 million charge
related to Zyprexa product liability and $450.3 million in charges
for asset impairment, restructuring and other special

(8) GlaxoSmithKline's earnings for 2007 reflect $522 million,
after taxes, in restructuring charges.

(9) Johnson & Johnson's earnings for 2007 include the following
after-tax items: charges of $807 million for in-process R&D, $528
million for restructuring and a $441 million charge for the
write-down of an intangible asset. These were partially offset by
a $267 million gain for international tax restructuring. Earnings in
2006 included after-tax charges of $448 million for in-process R&D,
partially offset by a $368 million after-tax gain associated with
the termination of the Guidant acquisition.

(10) Merck's earnings for 2007 reflect the following pretax items:
a $4.85 billion charge related to the U.S. Vioxx settlement
agreement; $810.2 million in restructuring charges, $280 million
in additional reserves related to future Vioxx legal costs, a
$454.6 million gain related to an insurance arbitration settlement,
$325.1 million in acquired research expense and a $671.1 million
civil governmental investigations charge. Earnings in 2006 reflected
the following pretax items: $935.5 million in restructuring
charges, $673 million in additional reserves for future Vioxx legal
costs, $48 million in reserves for Fosamax legal costs and $762.5
million in acquired research expense. The company had an effective
tax rate of 2.8% in 2007, compared with 28.7% in 2006.

(11) Novartis' results for both years are from continuing operations,
with earnings for 2007 reflecting the following pretax items: a $590
million charge related to an increase in the corporate environmental
provision and a $444 million restructuring charge. During 2007 the
company divested its Medical Nutrition and Gerber units, both of
which were classified as discontinued operations, yielding $5.8
billion in pretax divestment gains. Including that gain and income
associated with those units, the company had net income of $11.97
billion in 2007, compared with $7.2 billion in 2006

(12) Pfizer's comparisons are based on continuing operations, with
earnings in 2007 reflecting the following after-tax items: $2.51
billion in purchase accounting adjustments, $4.38 billion in other
significant items and $10 million in acquisition-related costs.
Earnings in 2006 reflected $3.13 billion in purchase accounting
adjustments, $813 million in other significant items and $14 million
in acquisition-related costs. Including a $69 million loss from
discontinued operations, the company had net income of $8.3 billion
in 2007. This compares with net income of $19.34 billion in 2006,
which included $8.31 billion in income and gains associated with
discontinued operations.

(13) Schering-Plough's results for 2007 reflect the November
acquisition of Organon BioSciences. The loss for 2007 reflects the
following after-tax items: $3.99 billion in purchase accounting
adjustments and $196 million in other special charges, partially
offset by a $455 million benefit related to acquisition-related
items. The company's net income in 2006 reflected $241 million in
special charges.

(14) Teva's earnings in 2006 reflected the following pretax items:
$1.3 billion in in-process R&D charges and $96 million in litigation
settlement, impairment and restructuring expenses.

(15) Wyeth's earnings reflect after-tax charges for product
initiatives of $194.4 million in 2007 and $154.5 million in 2006.
Earnings in 2006 also reflected a $70.4 million income tax
adjustment related to the reduction of certain deferred-tax asset
valuation allowances.
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Title Annotation:State of the Industry/The Issues
Publication:Chain Drug Review
Article Type:Company rankings
Geographic Code:1CANA
Date:Apr 28, 2008
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