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July 2004»

Pfizer Inc Second-Quarter 2004 Performance Report

Wednesday July 21, 6:49 am ET

Pfizer Delivers Strong Results
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Quarterly Revenues Increase 24 Percent to $12.274 Billion, Reflecting Inclusion of Post-Acquisition Results of Pharmacia and Performance of Pfizer's Industry-Leading Product Portfolio
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Second-Quarter Reported Net Income of $2.863 Billion; Second-Quarter Reported Diluted EPS of $.38
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Second-Quarter Adjusted Income* Grows 54 Percent to $3.611 Billion; Second-Quarter Adjusted Diluted EPS* Up 57 Percent to $.47
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Quarter Marked by U.S. Regulatory Submission of Macugen, E.U. Approval of Lyrica, U.S. Launches of Caduet and Spiriva, Announcement of Pfizer Helpful Answers Access Programs for America's Uninsured
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Pfizer Remains On Track to Submit an Industry-Record 20 Major U.S. Regulatory Filings in 2001-2006, Including Several Filings Later in 2004
---
Pfizer's Drug-Development Portfolio of New Molecular Entities Now 20 Percent Larger Than One Year Ago
---
Estimates of Full-Year 2004 Adjusted Income* of $16.3 Billion and Adjusted Diluted EPS* of $2.13 Reconfirmed

NEW YORK, July 21 /PRNewswire-FirstCall/ -- Pfizer today reported financial results for the second quarter of 2004. Prior-year results reflect legacy Pfizer, as well as legacy Pharmacia subsequent to the April 16, 2003, close of the Pharmacia acquisition.
"Pfizer's financial results in the second quarter reflect the Company's fundamental soundness and resilience in the face of dynamic market conditions," said Hank McKinnell, chairman and chief executive officer. "Our bottom line remains unaffected by these conditions. While a more-challenging business environment, marked by new competition and the effects of less- favorable foreign-exchange rates than we anticipated, led us to revise our full-year 2004 revenue expectations from about $54 billion to between $52.5 billion and $53 billion, our current and future product portfolio offerings remain robust. Pfizer has fourteen category-leading products; the top five are performing especially well; and the market shows clear and substantial potential for their further growth. Also significantly, our new- product pipeline is the strongest in our history. These facts underpin our confidence that we will achieve our previously stated goals for 2004 adjusted net income* and adjusted diluted EPS.*

"During the quarter, we achieved important milestones in advancing the next generation of Pfizer medicines to patients, including several major new- product filings, approvals, and launches. And we took significant new steps to help Americans -- especially the uninsured -- get the Pfizer medicines they need."

Pfizer revenues for the second quarter of 2004 grew 24 percent to $12.274 billion, compared to the second quarter of 2003. Revenue growth was driven by the inclusion of post-acquisition results of legacy Pharmacia products, good performances across a broad range of products, and the weakening of the U.S. dollar relative to a number of other currencies.

The Company's human pharmaceutical operations generated revenues of $10.704 billion, up 24 percent, in the second quarter. Revenues of Pfizer's Consumer Healthcare business were $869 million, up 21 percent. Pfizer's Animal Health revenues increased 26 percent in the period to $484 million.

Reported second quarter net income of $2.863 billion and reported diluted earnings per share of $.38 included non-cash charges of $523 million relating to purchase accounting ($.05 per share) attributable to the acquisition of Pharmacia, merger-related costs of $224 million ($.03 per share), certain significant items of $20 million ($.01 per share), and income from discontinued operations of $19 million, all on an after-tax basis. Excluding these items, adjusted income* grew 54 percent to $3.611 billion, and adjusted diluted EPS* increased 57 percent to $.47, compared to the same period in 2003.

Significant Accomplishments in Enhancement
of Current Products, Approval and Launch of New Products,
and Expansion of Patient Access Programs

"Pfizer's pharmaceutical business sustained its high performance and industry leadership in the second quarter, led in part by the continued strong growth of all of our five top medicines," said Karen Katen, executive vice president of the company and president of Pfizer Global Pharmaceuticals. "Both in the second quarter and through the year to date, our product performance and revenue growth have remained very strong -- in the top tier of the industry -- and that fact should not be obscured by our relatively minor revision of expected 2004 revenues," she said.

"Our slight full-year revision is based on the confluence of four factors: the good health news that last winter's U.S. respiratory-infection season was mild, which affected sales of Zithromax; payers' cost-driven decisions, including a shift to over-the-counter substitutes for anti-allergy prescription medicines, which affected Pfizer less that it did our competitors, as well as severe, access-limiting measures imposed on the industry in Germany; new-product competition, notably in the erectile- dysfunction market, which nonetheless continues to be led by Viagra at 77 percent of total U.S. prescriptions and now shows favorable signs of share stabilization; and the impact of less favorable foreign-exchange-rate changes.

"Our performance was strong despite these factors. Through restraint in spending, our 2004 bottom line will be unaffected. And going forward our expectations remain robust," Ms. Katen said.

Eleven products -- Lipitor, Norvasc, Zoloft, Celebrex, Neurontin, Zithromax, Viagra, Zyrtec, Diflucan, Bextra, and Xalatan -- each achieved revenues of more than half a billion dollars in the first half of 2004. In the second quarter alone, Lipitor, the largest-selling drug in the world, had revenues of $2.363 billion, up 17 percent over the comparable quarter of 2003.

"We introduced two major new medicines in the U.S. during the second quarter -- Caduet and Spiriva," Ms. Katen said. "We received approval for Lyrica in the E.U. We filed with the FDA for Macugen, an important new treatment for age-related macular degeneration.

"We also announced a major new initiative, Helpful Answers, to help America's uninsured get our medicine -- free for the most needy and at deep discounts for those with more resources. This major evolutionary step indicates our broadening scope as a company -- beyond discovering, developing, and bringing to market new medicines -- to include the larger role of improving public health. By addressing the overall picture, we intend to help shift the public's focus toward the value of health while addressing the concerns of its costs.

"This is important because the power of medicines to maintain and improve health is among the most efficient and effective forces in the healthcare sector. A recent flood of clinical proof reconfirms this fact. Indeed, the potential value of our medicines has been extended by recent clinical data.

"For example, fresh evidence on statins, and the new U.S. guidelines it has driven, portend more growth potential for Lipitor," Ms. Katen said. "Landmark studies such as ASCOT-LLA, CARDS, PROVE-IT, REVERSAL, and ALLIANCE have demonstrated the dramatic health benefits of ever-lower cholesterol, as effected by Lipitor, benefits such as reduced strokes, heart attacks, and the need for invasive procedures. The medical community's growing recognition of this value means that in the U.S. alone, 18.5 million new patients could benefit from lipid-lowering therapy, elevating the number of Americans Lipitor could help to about 79 million, or 40 percent of all adults. This new evidence on Lipitor underscores the opportunities for even our major products to help substantially more patients.

"Meanwhile, we continue to optimize our portfolio of leading medicines by supplementing our broadest-based therapeutics with specialty products that respond to urgent and unmet medical needs, in therapeutic categories ranging from cardiovascular health to oncology. Our emerging oncology portfolio, for instance, was validated by six presentations of new clinical data at the June meeting of the American Society of Clinical Oncology, putting Pfizer oncology again in the spotlight. One of the most promising reports was that the Pfizer experimental compound Sutent (SU-11248) shrank tumors in one-third of patients with metastatic renal-cell cancer and halted growth in 37 percent more.

"Pfizer is also aggressively addressing a central issue in the current debate over healthcare delivery: barriers to access, most notably affordability. Our efforts extend and enhance millions of lives worldwide, and we're deeply dedicated to finding life-saving and -enhancing medicines for future generations. But the miracles of modern medicine mean nothing to patients who can't get them. For instance, an estimated 43 million of America's residents today lack health insurance, and another 17 million with health insurance don't have prescription coverage.

"Pfizer responded to this problem by announcing our Helpful Answers program this month," Ms. Katen said. "It extends Pfizer's longstanding efforts to help Americans obtain a safe, secure supply of affordable pharmaceuticals. It will help all uninsured Americans, regardless of age or income, get Pfizer medicines at deep discounts, or even free, and to navigate the confusing maze of available programs to cut their prescription costs.

"We named the program Helpful Answers because its components include a toll-free number with live-operator help and website support to help clarify which Pfizer and government programs are more suited to people's specific circumstances and needs.

"By giving the uninsured buying power equal to the insured's, and by providing a safety net for the poorest, Pfizer's Helpful Answers initiative in the U.S. continues the Company's longstanding worldwide tradition of helping people get the medicines and care they need," Ms. Katen said.

"Other examples of how we're addressing affordability and access problems include Pfizer's Diflucan Partnership and the International Trachoma Initiative, two programs making major strides in treating and eliminating certain devastating, preventable diseases in developing countries. We're also partnering with the International Longevity Center in Europe to find solutions for Europe's rapidly aging population -- a significant public-health issue confronting the continent -- exploring viable solutions for the continent's overburdened healthcare and pension systems.

"More than a pharmaceutical company, Pfizer is a health company," Ms. Katen concluded. "With our medicines and our programs, we're helping patients and the medical community exert more control over individual health with tools ranging from better wellness education, to prevention, to early diagnosis and intervention, to medically appropriate and cost-effective care, to improved doctor-patient communication.

"Pfizer is committed to adding not just years to life, but life to years. Our work to develop new and better medicines for the future, and to make sure that people get the unfettered and timely access to medicines they need, demonstrates with action, not words, our deep belief that good health results in better quality of life for patients and benefits the bottom line for all society as well."

Performance milestones for marketed products during the second quarter include the following:

Lipitor
-- A supplemental filing to include the results of the REVERSing
Atherosclerosis with Aggressive Lipid Lowering (REVERSAL) clinical
trial was submitted in the E.U. in April 2004. These results showed
clearly and for the first time that aggressively lowering cholesterol
levels with a statin, Lipitor 80 mg, stopped the progression of
atherosclerosis, as measured by intravascular ultrasound.

-- Data from the Collaborative Atorvastatin Diabetes Study (CARDS),
presented at the recent American Diabetes Association meeting, showed
that the use of Lipitor can reduce the risk of a first major
cardiovascular event by 37 percent, the risk of a stroke by 48 percent,
and mortality by 27 percent in type 2 diabetes patients with relatively
low LDL-cholesterol levels. An estimated 150 million people worldwide
suffer from diabetes. Without effective treatment, about 65 percent of
diabetics will suffer a heart attack or stroke, a rate up to four times
higher than for non-diabetics.

-- Lipitor's value was further strengthened by a study published in the
Journal of the American College of Cardiology, which found that heart-
failure patients on statins were 55 percent less likely to die during
the year after they were prescribed the medicines. Statins reduced
mortality for heart failure even in patients who did not have high
cholesterol.

-- Recent data have suggested benefits of statins in the treatment of
Alzheimer's disease, rheumatoid arthritis, colorectal cancer, macular
degeneration, and glaucoma. For example, a pilot study presented at
the International Symposium on Advances in Alzheimer's Therapy showed
that the use of Lipitor in Alzheimer's patients slowed cognitive
decline and depressive symptoms over a one-year period. Also, The
Lancet recently published a study showing that Lipitor may help ease
the symptoms of rheumatoid arthritis.

Caduet
-- Caduet, the first-ever single medication to treat two cardiovascular
risk factors simultaneously, was launched in May in the U.S. This dual
therapy of Lipitor and Norvasc is available in multiple dosages to
offer physicians a variety of treatment options.

-- Caduet represents a bold change in how physicians treat cardiovascular
risk. About 30 million Americans have been diagnosed with high blood
pressure and high cholesterol. Both are important risk factors for
coronary heart disease, which is the country's leading cause of death.
When these conditions occur together, as they do in 35 to 50 percent of
patients with either condition, they further increase a patient's risk
of heart disease and stroke. Yet these two very common conditions
remain significantly underdiagnosed and undertreated. It is estimated
that fewer than 10 percent of these patients are actually reaching
their treatment targets for both conditions.

-- Early physician feedback is positive. Caduet can be integrated into a
wide range of treatment regimens for a broad range of patients with
blood-pressure and cholesterol-lowering needs. So far, 80 percent of
Caduet sales are new business, coming from patients other than those
already taking Norvasc and Lipitor together. Primary-care physicians
in particular appreciate the unique value of Caduet, as half of general
prescribers already confirm the value of Caduet and their intent to
prescribe the product.

-- As a first-in-kind treatment for both hypertension and dyslipidemia,
Caduet must overcome long-established treatment practices of managing
cardiovascular risk factors in isolation. Market adoption is likely to
take time. However, the launch of Caduet is having an immediate market
impact, compelling physicians to consider and act upon managing blood
pressure and cholesterol concurrently.

-- Early patient response to Caduet has been very enthusiastic. Patients
appreciate the fact that Caduet allows them to take fewer pills and
reduce their co-payments. Research indicates that these factors may
improve patients' perceived quality of life.

Norvasc
-- Results from the Valsartan Antihypertensive Long-term Use Evaluation
(VALUE) study, a six-year Novartis-sponsored trial comparing Diovan and
Norvasc, showed that patients taking Norvasc achieved superior
blood-pressure control and had significantly fewer heart attacks. In
addition, Norvasc patients reached lower blood-pressure levels earlier,
maintained better blood-pressure control through the trial, and were
treated with fewer add-on medications. These data were presented at
the European Society of Hypertension meeting and published online in
The Lancet. These results further confirm Norvasc's longstanding
status as a leading antihypertensive with proven efficacy and safety,
as well as its demonstrated ability to reduce cardiovascular events.

Viagra
-- In a study presented at the American Urological Association meeting,
Viagra improved erectile function for men after prostate-cancer
surgery. Erectile dysfunction is seen in more than 90 percent of
patients who have undergone this procedure.

-- In mid-April, Pfizer introduced the Value Card for Viagra. This
program, which is designed to facilitate access for patients, offers a
free Viagra prescription for every six eligible prescriptions filled
and includes a patient-education component. Since the launch of the
card, more than 54,000 patients have enrolled.

-- On a global basis, the erectile-dysfunction market continues to grow at
an impressive rate of nearly 25 percent. We believe this reflects the
significant number of men who are suffering with this condition and can
be helped by Viagra. Given that Viagra has maintained a leading market
share of 73 percent on a worldwide basis, it clearly remains the
world's therapeutic standard in its category, with an unrivaled track
record of safety and efficacy, and is well positioned to take advantage
of continued growth in the erectile-dysfunction market.

Spiriva
-- Since its U.S. launch in mid-May, Spiriva, which is being co-promoted
by Pfizer and the product's discoverer Boehringer Ingelheim, has
received more than 55,000 new prescriptions and achieved a 1.5-percent
share of the chronic obstructive pulmonary disease market.

-- Spiriva is available in more than 40 countries, including the U.K.,
Germany, and Spain. Spiriva's market share is trending steadily upward
in every market, indicating that physicians are increasingly
recognizing its benefits.

Celebrex
-- In May, the E.U.'s Committee for Proprietary Medicinal Products
reaffirmed the safety of Celebrex, Bextra, and Dynastat after a two-
year review.

-- A study published in the May 29 issue of The Lancet showed that elderly
patients on Celebrex had no increase in hospital admissions for
congestive heart failure (CHF) versus patients on placebo, compared to
an 80-percent increase in hospitalizations for CHF among patients
treated with Vioxx and a 40-percent increase among patients treated
with non-selective non-steroidal anti-inflammatory drugs.

Relpax
-- New clinical data presented at the American Headache Society showed
that 71 percent of migraine patients taking a 40-mg dose of Relpax
within 30 minutes of pain onset were pain-free after two hours, versus
only 23 percent of patients taking placebo.

Viracept
-- Pfizer launched a new 625-mg formulation of Viracept that reduces the
number of pills patients must take from five tablets twice daily to two
tablets twice daily, thereby helping to improve patient compliance.

Geodon
-- The approval of Geodon oral suspension was granted in 10 E.U. states in
June 2004.

Zithromax
-- Use of Zithromax for treatment of sexually transmitted diseases was
approved in Japan in May 2004.

Ellence
-- A supplemental filing to include ten-year efficacy and safety data in
the Ellence package insert was submitted to the FDA in April 2004.

Neurontin
-- A filing for use of Neurontin in epilepsy was submitted in Japan in
April 2004.

New Product Filings and Expansion of Development Pipeline
Highlight R&D Achievements in 2004

"We continue to be excited about R&D progress," said Dr. John LaMattina, president of Pfizer Global Research and Development. "Our pipeline of new drug candidates continues to expand. In fact, Pfizer's development portfolio of new molecular entities is about 20 percent larger than it was a year ago.

"Our late-stage pipeline is on track to deliver 20 major New Drug Applications (NDAs) in the five-year period ending in 2006, an accomplishment unprecedented in the worldwide pharmaceutical industry. We have already filed seven of the 20, and we expect to file several more NDAs by the end of this year. In addition, an impressive group of earlier-stage product candidates will provide the new drug opportunities for sustained growth throughout this decade."

Pfizer Global Research and Development has achieved a number of key objectives:

Lyrica
-- Lyrica, or pregabalin, our important next-generation treatment for
neuropathic pain and epilepsy, received marketing authorization in the
E.U. on July 6. Affecting an estimated three percent of Europeans,
neuropathic pain is among the most difficult-to-treat chronic pain
syndromes, with limited treatment options. In addition to providing
better seizure control for patients with epilepsy, it may also improve
nerve pain that results from multiple causes, including infection,
injury, diabetes, cancer, and AIDS. Pregabalin was filed with U.S.
regulators in October 2003 and is undergoing FDA review.

Exubera
-- A pooled analysis of two one-year studies presented at the American
Diabetes Association meeting showed that patients who added Exubera,
our inhaled-insulin product candidate in co-development with our
partners Aventis and Nektar, to their treatment regimen experienced no
clinically important negative effects on pulmonary function and
maintained glycemic control. A regulatory submission for Exubera in
the E.U. was completed in the first quarter of 2004.

-- Diabetes is a growing health problem that currently affects about
150 million people worldwide and is projected to affect about
300 million people by 2025. More than 30 percent of people with type 2
diabetes will eventually need insulin. The injection requirements of
current insulin therapies are a huge barrier to its use. Exubera
demonstrates glucose lowering equivalent to insulin injections and
improved glycemic control as compared to oral agents used alone.

Macugen
-- The U.S. filing for Macugen, a novel treatment for age-related macular
degeneration (AMD) that Pfizer is developing in partnership with its
discoverer, Eyetech Pharmaceuticals, Inc., was submitted to the FDA in
June and has received a fast-track designation. An FDA Advisory
Meeting on the compound is scheduled for August 27. We expect to
submit the regulatory filing in the E.U. and other markets later this
year. In Phase 2/3 clinical trial results reported at the American
Academy of Ophthalmology, Macugen slowed vision loss in patients with
all three subtypes of wet AMD, only one of which currently has FDA-
approved therapy.

Other key drug candidates continue to advance in late-stage development
or regulatory review, including:

- lasofoxifene, a selective estrogen modulator for osteoporosis;

- indiplon, in development with Neurocrine Biosciences, Inc., for
treatment of insomnia;

- parecoxib, the injectable prodrug of valdecoxib, for treatment of
acute pain;

- Daxas, in co-development with Altana Pharma for chronic obstructive
pulmonary disease and asthma, now under regulatory review in the
E.U.;

- SU-11248, an angiogenesis inhibitor for treatment of
gastrointestinal stromal tumors, renal carcinoma, and other
cancers;

- edotecarin for colorectal cancer and glioma;

- capravirine, a non-nucleotide reverse transcriptase inhibitor for
treatment of HIV;

- varenicline, a mechanistically novel treatment for smoking
cessation;

- torcetrapib/Lipitor, the next-generation treatment for
atherosclerosis;

- asenapine for schizophrenia and bipolar disorder, under co-
development with Akzo Nobel's Organon healthcare unit; and

- Zithromax-chloroquine for treatment of malaria.

Following these late-stage candidates is an extensive early- and mid-stage pipeline. Potential medical breakthroughs such as UK-427,857, a CCR-5 receptor inhibitor for treatment of HIV, and CP-690,550, a JAK-3 inhibitor for transplant rejection, are continuing to advance. Novel atherosclerosis treatments, such as ETC-216 from our Esperion Division, are also progressing.

The strength of our R&D capabilities is best captured in our efforts in oncology. The 22 compounds that we have in development are an impressive array of new chemical entities designed to attack cancer in a variety of ways. From best-in-class topoisomerase inhibitors like edotecarin, to first-in-class kinase inhibitors like SU-11248, to completely novel compounds to battle this disease, like the anti-CTLA-4 antibody CP-675,206, Pfizer scientists are applying all of our resources and technology to discovering and developing therapies to treat the most aggressive forms of this disease.

2004 to Provide Strong Growth Platform

David Shedlarz, executive vice president and chief financial officer, noted, "Although Pfizer operates in an increasingly challenging business environment, our unparalleled product portfolio, unequalled operational capabilities, and substantial financial depth and flexibility provide the Company with a strong platform for growth in 2004. We revised our full-year 2004 revenue estimate to between $52.5 billion and $53 billion to reflect market conditions and foreign-exchange impacts. We continue to expect to achieve our full-year targets for adjusted income* of $16.3 billion and adjusted diluted EPS* of $2.13 -- subject to the variables cited in the Disclosure Notice found in this report.

"We now expect merger-related cost synergies in 2004 of about $3.5 billion, due to the rapid integration of Pharmacia. We now plan to spend about $7.6 billion in R&D during 2004, reflective of higher cost synergies and increased productivity. Our 2004 estimates for reported net income have been revised from $11.9 billion to $12.1 billion and for reported diluted EPS from $1.55 to $1.58, subject to the variables cited in the Disclosure Notice set forth below. The change relates to the timing of merger-related costs. Although expectations have not changed regarding the overall level of merger- related expenditures that will be incurred this year, there has been a revision as to the amount that will be recorded on the balance sheet (an adjustment to the Pharmacia purchase price) and the amount recorded on the statement of income."

Mr. Shedlarz concluded, "Pfizer's operational and financial resilience is unprecedented in our industry. We remain exceptionally well positioned to leverage current and future opportunities, reinforce our differentiation from others, and exploit our scale and operational flexibility while shaping our Company and our future."

Pfizer Expands Its Efforts
to Ensure Patient Access to Medicines

In addition to the initiatives previously mentioned, during the second quarter of 2004 Pfizer made further progress in its initiatives to expand access to innovative medicines and to demonstrate good corporate citizenship by playing a lead role at the United Nations Global Compact Leaders' Summit on June 24. Pfizer was the first and only U.S.-based company to join the Compact, a network of U.N. agencies, companies, civil organizations, and academic institutions pursuing a shared set of principles on human rights, labor, and the environment. During the Summit, Pfizer Chairman and CEO Hank McKinnell called on the private sector, governments, and international organizations to reduce the economic and social impacts of bribery and corruption.

Dr. McKinnell concluded, "While continuing to deliver solid operational and financial performance, Pfizer is also taking a leading role in meeting the very real issues of access and affordability for pharmaceuticals worldwide. We are working in partnership with payers, providers, and non-governmental organizations on new and innovative approaches that will help bring more Pfizer medicines to more people, every day around the world. In today's challenging business environment, we have the right people, scale, strategy, and resilience to build on our industry leadership."

For additional details, please see the attached financial schedules, product revenue tables, and supplemental information.

DISCLOSURE NOTICE: The information contained in this document is as of July 21, 2004. The Company assumes no obligation to update any forward- looking statements contained in this document as a result of new information or future events or developments.

This document and the attachments contain forward-looking information about the Company's financial results and estimates, business prospects, and products in research that involve substantial risks and uncertainties. You can identify these statements by the fact that they use words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe," and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. 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 commercial potential of our products; the speed with which regulatory authorizations, pricing approvals, and product launches may be achieved; competitive developments affecting our current growth products; 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; trends toward managed care and health- care cost containment; possible U.S. legislation or regulatory action affecting, among other things, pharmaceutical pricing and reimbursement, including Medicaid and Medicare, and involuntary approval of prescription medicines for over-the-counter use; the potential impact of the Medicare Prescription Drug, Improvement and Modernization Act of 2003; legislation or regulations in markets outside the U.S. affecting product pricing, reimbursement, or access; contingencies related to actual or alleged environmental contamination; 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; any changes in business, political, and economic conditions due to the threat of future 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 mix; and the impact of acquisitions, divestitures, restructurings, product withdrawals, and other unusual items, including our ability to integrate and to obtain the anticipated results and synergies from our acquisition of Pharmacia. A further list and description of these 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, 2003, and in its periodic reports on Forms 10-Q and 8-K.

* "Adjusted income" and "adjusted diluted earnings per share (EPS)" are
defined as reported net income and reported diluted earnings per share
excluding discontinued operations, the cumulative effect of a change in
accounting principle, significant impacts of purchase accounting for
acquisitions, merger-related costs, and certain significant items. A
reconciliation to reported net income and reported diluted EPS is
provided within this document.

PFIZER INC AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)

(millions of dollars, except per common share data)

Second Quarter % Incr./ Six Months % Incr./
2004 2003 (Decr.)* 2004 2003 (Decr.)*

Revenues $12,274 $9,900 24 $24,762 $18,406 35

Costs and expenses:
Cost of sales 1,752 1,980 (11) 3,546 3,038 17
Selling, informational
and administrative
expenses 4,258 3,744 14 8,191 6,484 26
Research and development
expenses 1,806 1,713 5 3,456 2,931 18
Merger-related in-process
research and development
charges -- 5,130 ** 955 5,130 (81)
Merger-related costs 289 285 1 536 377 42
Other (income)/
deductions--net 741 454 63 1,521 636 139

Income/(loss) from continuing
operations before provision
for taxes on income, minority
interests and cumulative
effect of change in
accounting principles 3,428 (3,406) ** 6,557 (190) **

Provision for taxes on
income 582 269 116 1,390 1,032 35

Minority interests 2 (1) ** 4 (2) **

Income/(loss) from continuing
operations before cumulative
effect of change in
accounting principles 2,844 (3,674) ** 5,163 (1,220) **

Discontinued operations:
Income from operations of
discontinued businesses
and product lines
--net of tax 17 -- -- 30 38 (22)
Gains on sales of
discontinued businesses
and product lines
--net of tax 2 83 (98) 2 2,285 (100)

Discontinued
operations--net of tax 19 83 (77) 32 2,323 (99)

Income/(loss) before
cumulative effect of
change in accounting
principles 2,863 (3,591) ** 5,195 1,103 371

Cumulative effect of
change in accounting
principles--net of tax -- -- ** -- (30) **

Net income/(loss) $ 2,863 $(3,591) ** $ 5,195 $ 1,073 384

Earnings/(loss) per common
share--Basic:
Income/(loss) from continuing
operations before
cumulative effect of
change in accounting
principles $ .38 $ (.49) ** $ .69 $ (.18) **
Discontinued operations:
Income from operations of
discontinued businesses
and product lines
--net of tax -- -- -- -- -- --
Gains on sales of
discontinued businesses
and product lines
--net of tax -- .01 ** -- .34 **
Discontinued
operations--net of tax -- .01 ** -- .34 **
Income/(loss) before
cumulative effect of change
in accounting principles .38 (.48) ** .69 .16 331
Cumulative effect of
change in accounting
principles--net of tax -- -- -- -- -- --
Net income/(loss) $ .38 $ (.48) ** $ .69 $ .16 331

Earnings/(loss) per common
share--Diluted:
Income/(loss) from
continuing operations
before cumulative
effect of change
in accounting
principles $ .38 $ (.49) ** $ .68 $ (.18) **
Discontinued operations:
Income from operations of
discontinued businesses
and product lines
--net of tax -- -- -- -- -- --
Gains on sales of
discontinued businesses
and product lines
--net of tax -- .01 ** -- .34 **
Discontinued
operations--net of tax -- .01 ** -- .34 **
Income/(loss) before
cumulative effect of
change in accounting
principles .38 (.48) ** .68 .16 325
Cumulative effect of
change in accounting
principles--net of tax -- -- -- -- -- --
Net income/(loss) $ .38 $ (.48) ** $ .68 $ .16 325

Weighted average shares used
to calculate earnings/(loss)
per common share:
Basic 7,574.1 7,453.4 7,580.2 6,777.4
Diluted 7,664.0 7,453.4 7,671.6 6,777.4

* - Percentages may reflect rounding adjustments.
** - Calculation not meaningful.

1. The above financial statement presents the three-month and six-month
periods ended June 27, 2004 and June 29, 2003. Subsidiaries operating
outside the United States are included for the three-month and six-
month periods ended May 23, 2004 and May 25, 2003.

2. On April 16, 2003, we completed our acquisition of Pharmacia
Corporation (Pharmacia) and Pfizer and Pharmacia combined operations.
The acquisition has been accounted for as a purchase under accounting
principles generally accepted in the United States of America (GAAP).
Pharmacia's financial results have been reported in Pfizer's financial
reporting beginning on April 16, 2003.

3. As required by Financial Accounting Standards Board Interpretation No.
4, Applicability of FASB Statement No. 2 to Business Combinations
Accounted for by the Purchase Method ("FIN 4"), the portion of the
purchase price allocated to acquired in-process research and
development of $955 million (primarily relates to our acquisition of
Esperion Therapeutics, Inc. on February 10, 2004 ($920 million)), was
expensed in the six-month period ended June 27, 2004 and $5,130 million
(in connection with the acquisition of Pharmacia) was expensed in the
three and six-month periods ended June 29, 2003. A project by project
valuation was performed by third party valuation specialists to
determine the fair value of research and development projects which
were in-process, but not yet completed.

4. Under GAAP, quarterly earnings per common share (EPS) computations must
stand on their own and therefore, the sum of EPS for each of the first
two quarters of 2003 does not equal the EPS for the first six months of
2003. EPS for the second quarter of 2003 was computed using the
weighted average number of common shares outstanding during the quarter
while EPS for the first six months of 2003 was computed using the
weighted average number of common shares outstanding during the first
six months of 2003. The weighted average number of common shares
outstanding was higher for the second quarter of 2003 than for the
first six months of 2003 as a result of issuing approximately 1.8
billion common shares to complete the Pharmacia acquisition on April
16, 2003. The significant increase in the number of common shares
outstanding from the first quarter of 2003 resulted in our having
different bases of shares outstanding and therefore the EPS results
were not additive.

5. Other (income)/deductions -- net includes amortization expense relating
to intangible assets acquired from Pharmacia of $838 million and $1,638
million for the three-month and six-month periods ended June 27, 2004,
and $559 million for the three-month and six-month periods ended June
29, 2003.

6. During the first six months of 2004, we either sold or decided to sell
certain businesses and product lines. Specifically, we agreed to sell
our in-vitro allergy and diagnostics testing (Diagnostics) business for
$575 million in cash. The sale was completed on April 23, 2004. We also
agreed to sell our surgical ophthalmic products businesses for $450
million in cash (the sale was completed on June 26, 2004) and certain
non-core consumer healthcare products marketed primarily in Europe, for
135 million Euro (approximately $163 million). In March 2004, we
decided to sell certain European generic pharmaceutical businesses.
Diagnostics, our surgical ophthalmic business, our European generic
businesses and certain of the non-core consumer healthcare products
were acquired in connection with our acquisition of Pharmacia in April
2003. We have included the results of operations of these businesses
and product lines in discontinued operations for three-month and six-
month periods ended June 27, 2004. Due to the timing of our acquisition
of Pharmacia in April 2003, the results of operations relating to these
businesses and product lines for the three-month and six-month periods
ended June 29, 2003 were included in our consolidated results of
operations from the acquisition date except for those relating to
certain legacy Pfizer non-core consumer healthcare products which have
been included in discontinued operations for all periods. Gains, where
applicable, on these transactions are recognized in the period in which
the sale is completed.

7. In April 2003, we completed the sale of the hormone replacement therapy
femhrt for $160 million in cash ($83 million after-tax gain
recognized). In March 2003, we sold the Adams confectionery products
business for $4.2 billion in cash ($1,824 million after-tax gain
recognized), the Schick-Wilkinson Sword shaving products business for
$930 million in cash ($262 million after-tax gain recognized) and the
oral contraceptive Estrostep and Loestrin for $197 million in cash
($116 million after-tax gain recognized). The above financial statement
reflects these businesses and product lines as discontinued operations
for all periods presented.

8. On January 1, 2003, we adopted Statement of Financial Accounting
Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations.
As a result, we recorded a non-cash pre-tax charge of $47 million ($30
million net of tax) for the change in accounting for costs associated
with the eventual retirement of certain manufacturing facilities. This
charge is reported as a one-time cumulative effect of a change in
accounting principle as of the beginning of 2003.

9. The financial results for the three-month and six-month periods ended
June 27, 2004 are not necessarily indicative of the results which
ultimately might be achieved for the current year.

PFIZER INC AND SUBSIDIARY COMPANIES
RECONCILIATION FROM REPORTED INCOME/(LOSS) AND EARNINGS/(LOSS)
PER SHARE TO ADJUSTED INCOME AND EARNINGS PER SHARE
(UNAUDITED)

(millions of dollars, except per common share data)

Second Quarter % Incr./ Six Months % Incr./
2004 2003 (Decr.) 2004 2003 (Decr.)

Reported net
income/(loss) $2,863 $(3,591) ** $5,195 $1,073 384
Discontinued
operations --
net of tax (19) (83) (77) (32) (2,323) (99)

Cumulative effect of
change in
accounting principles
-- net of tax -- -- ** -- 30 **

Purchase accounting
adjustments
-- net of tax 523 5,840 (91) 2,036 5,840 (65)

Merger-related costs
-- net of tax 224 178 26 351 234 50

Certain significant items
-- net of tax 20 -- -- 40 -- --

Adjusted income $3,611 $2,344 54 $7,590 $4,854 56

Reported diluted
earnings/(loss) per
common share $ .38 $ (.48) ** $ .68 $ .16 325

Discontinued operations
-- net of tax -- (.01) ** -- (.34) **

Cumulative effect of change
in accounting principles
-- net of tax -- -- -- -- -- --

Purchase accounting
adjustments
--net of tax .05 .77 (94) .25 .86 (71)

Merger-related costs
-- net of tax .03 .02 50 .05 .03 67

Certain significant
items -- net of tax .01 -- -- .01 -- --

Adjusted diluted
earnings per common
share $ .47 $ .30 57 $ .99 $ .71 39

** - Calculation not meaningful.
Certain amounts and percentages may reflect rounding adjustments.

5. On January 1, 2003, we adopted Statement of Financial Accounting
Standards (SFAS) No. 143, Accounting for Asset Retirement Obligations.
As a result, we recorded a non-cash pre-tax charge of $47 million ($30
million net of tax) for the change in accounting for costs associated
with the eventual retirement of certain manufacturing facilities. This
charge is reported as a one-time cumulative effect of a change in
accounting principle as of the beginning of 2003.

6. In 2004, we revised our basis for the components of adjusted income.
For example, copromotion charges and payments for intellectual property
rights for unapproved products being developed by third parties were
previously excluded from adjusted income and the operational
contribution of divestitures were previously included in adjusted
income. We have revised the 2003 adjusted income to conform to the 2004
presentation. Adjusted income and diluted earnings per common share as
shown above exclude the following items:

(millions of dollars) Second Quarter Six Months
2004 2003 2004 2003

Discontinued operations, pre-tax:
Income from operations of
discontinued businesses and
product lines (a) $ (25) $ -- $ (45) $ (62)
Gains on sales of discontinued
businesses and product lines (a) (3) (139) (3) (3,885)
Total discontinued operations,
-- pre-tax (28) (139) (48) (3,947)
Income taxes 9 56 16 1,624
Total discontinued operations
-- net of tax (b) (19) (83) (32) (2,323)

Cumulative effect of change in
accounting principles--net of tax -- -- -- 30

Purchase accounting adjustments,
-- pre-tax:
In-process research and
development charges (c) -- 5,130 955 5,130
Intangible amortization
and other (d) 820 584 1,623 584
Sale of acquired inventory
written up to fair value (e) -- 392 -- 392
Total purchase accounting
adjustments,pre-tax 820 6,106 2,578 6,106
Income taxes (297) (266) (542) (266)
Total purchase accounting
Adjustments-- net of tax 523 5,840 2,036 5,840

Merger-related costs, pre-tax:
Integration costs--Pharmacia (f) 141 221 242 301
Integration costs--Other (f) 9 11 12 20
Restructuring charges--Pharmacia (f) 134 52 277 52
Restructuring charges--Other (f) 5 1 5 4
Total merger-related costs, pre-tax 289 285 536 377
Income taxes (65) (107) (185) (143)
Total merger-related costs
-- net of tax 224 178 351 234
Certain significant items, pre-tax:
Operating results of divested legacy
Pharmacia research facility (g) 32 -- 64 --
Total certain significant items,
-- pre-tax 32 -- 64 --
Income taxes (12) -- (24) --
Total certain significant
items--net of tax 20 -- 40 --

Total discontinued operations,
cumulative effect of change in
accounting principles, purchase
accounting adjustments, merger-
related costs and certain
significant items--net of tax $ 748 $5,935 $2,395 $3,781

(a) Included in Discontinued operations--net of tax
(b) Includes purchase accounting impacts (net of tax) related to 2004
discontinued operations of $20 million in the second quarter and
first six months of 2003
(c) Included in Merger-related in-process research and development
charges
(d) Included primarily in Other (income)/deductions--net
(e) Included in Cost of sales
(f) Included in Merger-related costs
(g) Included in Research and development expenses

PFIZER INC
SEGMENT/PRODUCT REVENUES
SECOND QUARTER 2004
(UNAUDITED)
(millions of dollars)

QUARTER-TO-DATE
WORLDWIDE U.S. INTERNATIONAL
% % %
2004 2003 Chg 2004 2003 Chg 2004 2003 Chg
TOTAL
REVENUES 12,274 9,900 24 6,595 5,832 13 5,679 4,068 40
HUMAN PHARMA-
CEUTICAL 10,704 8,602 24 5,886 5,154 14 4,818 3,448 40

-CARDIOVASCULAR
AND METABOLIC
DISEASES 3,963 3,568 11 1,872 1,859 1 2,091 1,709 22
LIPITOR 2,363 2,015 17 1,313 1,186 11 1,050 829 27
NORVASC 1,032 1,003 3 412 424 (3) 620 579 7
ACCUPRIL/
ACCURETIC 153 150 2 81 87 (8) 72 63 15
CARDURA 161 141 15 1 4 (60) 160 137 17
CADUET 2 0 -- 2 0 -- 0 0 --

-CENTRAL NERVOUS
SYSTEM
DISORDERS 2,036 1,579 29 1,434 1,151 25 602 428 40
ZOLOFT 789 630 25 608 480 27 181 150 21
NEURONTIN 782 592 32 644 473 36 138 119 16
GEODON 110 74 49 91 62 47 19 12 61
XANAX/
XANAX XR 86 64 33 23 41 (45) 63 23 172
ARICEPT* 74 58 28 0 0 -- 74 58 28
RELPAX 38 9 321 21 0 -- 17 9 75

-ARTHRITIS
AND PAIN 1,146 648 77 773 444 74 373 204 84
CELEBREX** 728 344 112 504 239 110 224 105 115
BEXTRA 275 185 49 242 179 35 33 6 464

-INFECTIOUS AND
RESPIRATORY
DISEASES 1,125 902 25 620 504 23 505 398 27
ZITHROMAX 370 314 18 260 215 21 110 99 11
DIFLUCAN 285 262 9 152 135 13 133 127 4
VFEND 71 46 53 30 20 52 41 26 54
ZYVOX 110 42 163 81 34 136 29 8 286

-UROLOGY 583 525 11 320 309 4 263 216 22
VIAGRA 389 419 (7) 201 227 (12) 188 192 (2)
DETROL/
DETROL LA 182 98 85 115 77 49 67 21 215

-ONCOLOGY 305 200 53 150 139 7 155 61 158
CAMPTOSAR 147 111 32 133 107 25 14 4 211
ELLENCE 88 40 117 17 13 34 71 27 156

-OPHTHALMOLOGY 291 110 164 91 45 103 200 65 205
XALATAN/
XALCOM 291 110 164 91 45 103 200 65 205

-ENDOCRINE
DISORDERS 223 108 106 66 51 30 157 57 175
GENOTROPIN 180 89 102 47 39 22 133 50 164

-ALL OTHER 894 776 15 498 545 (9) 396 231 71
ZYRTEC 306 339 (10) 306 339 (10) 0 0 --

-ALLIANCE
REVENUE***
(Aricept,
Mirapex,
Spiriva,
Rebif,
Celebrex,
and Bextra) 138 186 (26) 62 107 (43) 76 79 (3)

ANIMAL HEALTH 484 383 26 217 187 16 267 196 36

CONSUMER
HEALTHCARE 869 717 21 421 411 3 448 306 46

OTHER**** 217 198 10 71 80 (13) 146 118 25

On April 16, 2003, Pfizer completed its acquisition of Pharmacia
Corporation ("Pharmacia") and Pfizer and Pharmacia combined operations.
The acquisition has been accounted for as a purchase under accounting
principles generally accepted in the United States of America. Reported
results of operations of Pfizer issued after completion of the
acquisition have not been restated retroactively to reflect the
historical results of operations of Pharmacia.

* - Represents direct sales under license agreement with Eisai Co.,
Ltd.
** - Includes direct sales under license agreement with Pharmacia in
2003 prior to merger.
*** - Includes alliance revenue for Bextra and Celebrex under copromotion
agreements with Pharmacia in 2003 prior to merger.
**** - Includes Capsugel and PCS.

Certain amounts and percentages may reflect rounding adjustments.

Certain prior year data have been reclassified to conform to the current
year presentation.

PFIZER INC
SEGMENT/PRODUCT REVENUES
SIX MONTHS 2004
(UNAUDITED)
(millions of dollars)

Year-TO-DATE
WORLDWIDE U.S. INTERNATIONAL
% % %
2004 2003 Chg 2004 2003 Chg 2004 2003 Chg
TOTAL
REVENUES 24,762 18,406 35 13,744 11,265 22 11,018 7,141 54

HUMAN PHARMA-
CEUTICAL 21,745 16,148 35 12,348 10,036 23 9,397 6,112 54

-CARDIOVASCULAR
AND METABOLIC
DISEASES 8,217 7,096 16 4,160 3,893 7 4,057 3,203 27
LIPITOR 4,860 4,114 18 2,886 2,566 12 1,974 1,548 27
NORVASC 2,173 1,986 9 901 860 5 1,272 1,126 13
ACCUPRIL/
ACCURETIC 344 319 8 205 200 3 139 119 17
CARDURA 309 276 12 4 8 (53) 305 268 14
CADUET 30 0 -- 30 0 -- 0 0 --

-CENTRAL NERVOUS
SYSTEM
DISORDERS 3,983 3,189 25 2,814 2,437 15 1,169 752 55
ZOLOFT 1,599 1,388 15 1,252 1,100 14 347 288 21
NEURONTIN 1,478 1,217 22 1,214 995 22 264 222 20
GEODON 198 151 31 163 131 24 35 20 77
XANAX/
XANAX XR 171 64 167 48 41 17 123 23 434
ARICEPT* 145 112 29 0 0 -- 145 112 29
RELPAX 67 41 64 37 25 50 30 16 86

-ARTHRITIS
AND PAIN 2,322 737 215 1,601 444 261 721 293 146
CELEBREX** 1,497 372 303 1,062 239 344 435 133 230
BEXTRA 545 185 195 486 179 172 59 6 914

-INFECTIOUS AND
RESPIRATORY
DISEASES 2,360 1,989 19 1,343 1,209 11 1,017 780 30
ZITHROMAX 837 863 (3) 595 642 (7) 242 221 9
DIFLUCAN 588 547 7 329 298 10 259 249 4
VFEND 135 81 66 56 38 49 79 43 80
ZYVOX 207 42 396 154 34 351 53 8 602

-UROLOGY 1,218 999 22 690 601 15 528 398 32
VIAGRA 805 894 (10) 420 520 (19) 385 374 3
DETROL/
DETROL LA 389 98 295 260 77 238 129 21 498

-ONCOLOGY 548 200 175 253 139 81 295 61 392
CAMPTOSAR 239 111 114 214 107 100 25 4 454
ELLENCE 167 40 314 34 13 162 133 27 384

-OPHTHALMOLOGY 570 110 417 191 45 324 379 65 480
XALATAN/
XALCOM 570 110 417 191 45 324 379 65 480

-ENDOCRINE
DISORDERS 443 108 309 146 51 186 297 57 419
GENOTROPIN 360 89 303 106 39 172 254 50 404

-ALL OTHER 1,801 1,203 50 1,004 856 17 797 347 131
ZYRTEC 605 633 (4) 605 633 (4) 0 0 --

-ALLIANCE
REVENUE***
(Aricept,
Mirapex,
Spiriva,
Rebif,
Celebrex,
and Bextra) 283 517 (45) 146 361 (60) 137 156 (13)

ANIMAL HEALTH 912 652 40 416 316 32 496 336 47

CONSUMER
HEALTHCARE 1,673 1,296 29 838 788 6 835 508 65

OTHER**** 432 310 39 142 125 14 290 185 55

Certain amounts and percentages may reflect rounding adjustments.

Certain prior year data have been reclassified to conform to the current
year presentation.

PFIZER INC
SUPPLEMENTAL INFORMATION

SHARES OUTSTANDING AND EPS INFORMATION:
1H04 1H03
Shares Outstanding (millions) - Basic EPS 7,580.2 6,777.4
Basic EPS $.69 $.16
Adjusted Basic EPS* $1.00 $.72

Shares Outstanding (millions) - Diluted EPS 7,671.6 6,846.8
Diluted EPS $.68 $.16+
Adjusted Diluted EPS* $.99 $.71

2Q04 2Q03
Shares Outstanding (millions) - Basic EPS 7,574.1 7,453.4
Basic EPS $.38 ($.48)
Adjusted Basic EPS* $.48 $.31

Shares Outstanding (millions) - Diluted EPS 7,664.0 7,535.1
Diluted EPS $.38 ($.48)+
Adjusted Diluted EPS* $.47 $.30

* "Adjusted income," "adjusted basic earnings per share (EPS)," and
"adjusted diluted EPS" are defined as reported net income, reported
basic EPS, and reported diluted EPS excluding discontinued operations,
the cumulative effect of a change in accounting principle, significant
impacts of purchase accounting for acquisitions, merger-related costs,
and certain significant items. A reconciliation to reported net income
and reported diluted EPS is provided within this document.

+ Diluted EPS calculated using basic shares outstanding due to loss from
continuing operations.

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