Pfizer 2008 Annual Report Download - page 28

Financial Review
Pfizer Inc and Subsidiary Companies
In February 2009, we terminated the development programs for PD-332334, an alpha2delta ligand compound for the treatment of
GAD, and esreboxetine, for the treatment of fibromyalgia, because it was considered unlikely that either compound would provide
meaningful benefit to patients beyond the current standard of care.
In January 2009, we terminated the development program for axitinib, a multi-targeted kinase inhibitor, for the treatment of
pancreatic cancer, after the review of interim data showed that the trial would not demonstrate superiority to the current standard of
care.
In November 2008, we terminated the development program for CP-945,598, a cannabinoid-1 receptor antagonist for the treatment
of obesity, based on changing regulatory perspectives on the benefit-risk profile of the cannabinoid-1 class and likely new regulatory
requirements for approval.
In April 2008, we announced the discontinuation of a Phase 3 clinical trial of single-agent tremelimumab (CP-675,206), an anti-
CTLA4 monoclonal antibody, in patients with advanced melanoma, after the review of interim data showed that the trial would not
demonstrate superiority to standard chemotherapy.
Additional product-related programs are in various stages of discovery and development. Also, see the discussion in the “Our
Strategic Initiatives—Strategy and Recent Transactions: Acquisitions, Licensing and Collaborations” section of this Financial
Review.
Animal Health
Revenues of our Animal Health business follow:
YEAR ENDED DECEMBER 31, % CHANGE
(MILLIONS OF DOLLARS) 2008 2007 2006 08/07 07/06
Livestock products $1,784 $1,654 $1,458 813
Companion animal products 1,041 985 853 615
Total Animal Health $2,825 $2,639 $2,311 714
Our Animal Health business is one of the largest in the world.
The increase in Animal Health revenues in 2008, compared to 2007, was primarily attributable to:
•for livestock products, the continued good performance of our cattle biologicals and intramammaries franchises in 2008;
•for companion animal products, the good performances of Revolution (a parasiticide for dogs and cats), and new product launches,
such as Convenia ( first-in-class single-dose treatment antibiotic therapy for dogs and cats), Cerenia (treatment and prevention of
vomiting in dogs) and Improvac (boar taint vaccine for pigs); and
•the favorable impact of foreign exchange, which increased revenues by 3%.
The increase in Animal Health revenues in 2007, compared to 2006, was primarily attributable to:
•for livestock products, the continued good performance of our cattle biologicals and intramammaries franchises in 2007, as well as
revenues from Embrex, which we acquired in the first quarter of 2007;
•for companion animal products, the good performances of Revolution; Rimadyl (for treatment of pain and inflammation associated with
canine osteoarthritis and soft-tissue orthopedic surgery); and new product launches, such as Convenia, Slentrol (weight management
for dogs) and Cerenia; and
•the favorable impact of foreign exchange, which increased revenues by 5%.
Costs and Expenses
Cost of Sales
Cost of sales decreased 28% in 2008, while revenues were essentially flat in 2008, and cost of sales increased 47% in 2007, while
revenues were flat in 2007. Cost of sales as a percentage of revenues decreased in 2008 compared to 2007 and increased in 2007
compared to 2006.
Cost of sales in 2008, compared to 2007, decreased as a result of:
•asset impairment charges, write-offs and other exit costs associated with Exubera of $2.6 billion recorded in 2007 (see the “Our 2008
Performance: Certain Charges—Exubera” section of this Financial Review);
•savings related to our cost-reduction initiatives; and
•the favorable impact of foreign exchange on expenses,
26 2008 Financial Report