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Wyeth Boosts Profit Outlook

Robert Steyer

Thanks to a second-quarter financial report that beat Wall Street estimates, Wyeth (WYE) said Thursday it is raising its full-year earnings guidance.

"We had an excellent first half and look forward to a great year," Robert Essner, the chairman and CEO, told analysts during a telephone conference call.

He raised the full-year earnings outlook to a range of $3.48 to $3.56, excluding one-time items. The previous guidance had been $3.40 to $3.50. The consensus had been $3.49.

The news sent Wyeth's stock up 97 cents, or 1.7%, to $57.58.

For the three months ended June 30, Wyeth earned 90 cents a share, excluding items, or 3 cents better than what was expected by analysts polled by Thomson First Call.

When all items are included, Wyeth earned $1.2 billion, or 87 cents a share, on revenue of $5.65 billion. Analysts had been expecting revenue of $5.48 billion. For the same period last year, Wyeth earned $1.06 billion, or 78 cents a share, on revenue of $1.37 billion.

Wyeth executives said they expect to launch as many as seven new drugs in the next 18 months, including two this month, the oral contraceptive Lybrel and the advanced kidney cancer drug Torisel. Lybrel, which eliminates menstrual periods, was approved by the Food and Drug Administration May 22. Torisel was cleared May 30.

Next on the FDA menu is Pristiq for treating symptoms of menopause. The agency is expected to act early next week. In mid-August, the FDA is scheduled to decide on bifeprunox for schizophrenia. Wyeth is collaborating with the drug's developer, Solvay of Belgium.

During the second quarter, many of Wyeth's largest drugs posted double-digit sales gains compared with the year-ago period. Worldwide sales of Prevnar, a vaccine that prevents invasive pneumococcal bacteria in infants and young children, gained 22% to $635 million, including a 35% rise in foreign markets.

The multi-faced Enbrel gained 37% to $503 million in markets outside the U.S. and Canada, which are covered by its partner Amgen(AMGN). Enbrel treats chronic inflammatory diseases such as rheumatoid arthritis and psoriasis.

The depression drugs Effexor and Effexor XR remain Wyeth's biggest source of revenue, posting a 6% gain to $977 million. Most of the sales come from patent-protected Effexor XR, which will avoid generic competition in the U.S. for another three years.

Two other major products, the intravenous antibiotic Zosyn and the acid reflux disease drug Protonix, recorded strong gains, but executives said future sales may be affected by uncertainty over generic competition.

Zosyn's sales advanced 17% to $280 million. The drug has lost patent protection. So far though, no generic competitor has emerged, said Bernard Poussot, who is vice chairman, president and chief operating officer. Poussot said there may be generic versions in some foreign markets starting in the third quarter and perhaps in the U.S. later this year.

The generic challenge to Protonix, whose second-quarter sales climbed 25% to $550 million, is more difficult to predict. Wyeth has sued Teva Pharmaceutical Industries(TEVA) for patent infringement.

Although Teva hasn't sold generic Protonix, it is possible the company could make an "at-risk" launch in early August. Generic drugmakers make such launches when patent litigation isn't settled, but if they lose in court, they can be forced to pay high damages.

Wyeth argues that Protonix should be protected until at least July 2010 and as late as January 2011.