Pfizer plans to implement a company-wide cost-reduction initiative to lower its cost base in 2007 and 2008, in an effort to provide more flexibility in the face of changing market conditions. This new initiative is in addition to the Adapt to Scale (AtS) initiative. By 2008, these savings will be more than $4 billion and as a result, the company expects an average annual growth to be in the high single digits over 2007-08, though revenues are expected to stay flat during that span. According to the company, by 2009 it expects a return to revenue growth as the impact of major patent expirations declines and the performance of new products becomes more significant in the marketplace.

Pfizer's chief executive officer, Jeffrey B. Kindler said, "Pfizer is a strong company with a bright future. We will continue to invest in a wide and promising range of opportunities for growth. Our pipeline of new products and new approaches to discovery and development, coupled with our strategy of acquiring attractive new products and technologies externally, promise to deliver strong and renewed growth opportunities over time. By moving quickly now to transform our company, we will enhance our competitive strength and put ourselves in the best possible position to capitalize on all the opportunities available to us."

Covalent Group, Inc. has signed multiple Phase I and Phase II contracts valued at $8.2 million. All of the contracts are with the same client and relate to the development of an agent to treat multiple types of influenza, including Avian Flu. Services include consulting on clinical trial design and protocol development, project and study site management, field operations, data management, and biostatistical support.

Kenneth M. Borow, M.D., chief executive officer and president for Covalent Group, commented, "We are exceptionally proud of our involvement in this important development program which we believe could ultimately prove to be beneficial to millions of people worldwide. These contract wins were the result of highly coordinated business development and clinical operations efforts on the part of Covalent Group and Remedium Oy, a privately owned, full-service CRO based in Espoo, Finland that we expect to acquire. We believe that these contract wins represent a strong proof-of-concept that the combination of Covalent and Remedium, resulting in the newly created company Encorium Group, Inc., will be a highly competitive force in the drug development and CRO marketplaces."

The closing of the Remedium transaction is targeted for November 1, 2006 and is subject to the approval of Covalent Group's shareholders.

Wyeth

3Q Revenues: $5.1 billion (+9%)

3Q Earnings: $1.2 billion (+33%)

YTD Revenues: $15.1 billion (+8%)

YTD Earnings: $3.3 billion (+14%)

Comments: Enbrel sales, outside of the U.S. and Canada, were $378 million for the quarter and $1.1 billion YTD, increases of 37% and 38%, respectively. Prevnar sales were $510 million for the 2006 third quarter and $1.5 billion for the 2006 first nine months, increases of 30% and 32%, respectively. Effexor sales were $924 million for the 2006 third quarter and $2.8 billion for the 2006 first nine months, increases of 7% and 6%, respectively. Protonix sales were $452 million for the quarter and $1.4 billion YTD, increases of 12% and 9%, respectively. Methylnaltrexone received fast track designation from the FDA in the quarter for the treatment of post-operative ileus.

Lilly

3Q Revenues: $3.9 billion (+7%)

3Q Earnings: $873.6 million (+10%)

YTD Revenues: $11.4 billion (+6%)

YTD Earnings: $2.5 billion (+12%)*

Comments: Revenue growth in the quarter was driven by Cymbalta, Zyprexa and other newer products. Alimta, Byetta, Cialis, Cymbalta, Forteo, Strattera, Symbyax, Xigris and Yentreve, collectively grew 45% to $959.7 million. Diabetes care revenue, including Humalog, Humulin, Actos and Byetta, increased 9% to $712.4 million. Gemzar sales were $354.6 million, up 6%.

*The 2005 year-to-date amounts are adjusted to exclude the $1.1 billion second-quarter product liability charge, which includes the $690 million for the previously announced Zyprexa product liability settlement as well as reserves, primarily related to Zyprexa. These charges have been offset by estimated recoveries from the company's insurance coverage.

Baxter

3Q Revenues: $2.6 billion (+7%)

3Q Earnings: $374 million (earnings were $116 million in 3Q2005)

YTD Revenues: $7.6 billion (+3%)

YTD Earnings: $965 million (+45)

Comments: Growth in the quarter was driven by the company's BioScience business, with sales of $1.1 billion, up 15%. Renal sales were up 6% to $519 million. In the quarter, the company signed a definitive agreement for the sale of its Transfusion Therapies business for $540 million.

Serono

3Q Revenues: $699 million (+9.5%)

3Q Earnings: $170.6 million (+20%)

Comments: Product sales grew 8% to $619.2 million. Rebif sales were up 19% to $374.8 million. Sales of Raptiva were up 81% to $18 million. Novantrone sales were $2.8 million, down 85% due to generic competition. In the quarter, the company in-licensed safinamide in early Phase III in Parkinson's Disease.

Gilead Sciences

3Q Revenues: $748.7 million (+52%)

3Q Loss: $52.2 million* (earnings were $179 million 3Q2005)

YTD Revenues: $2.1 billion (+50%)

YTD Earnings: $475.7 million (-11%)

Comments: Product sales were a record $670.1 million for the quarter, up 43%, driven by its HIV franchise with sales up 53% to $557.3 million. Truvada sales were $309 million, up 90%. Atripla, launched in July, reached sales of $68.4 million. Sales of Hepsera totaled $55.1 million for the quarter, up 18%.

*Loss in the quarter included a charge of $355.6 million for purchased in-process research and development (IPR&D) incurred in connection with the acquisition of Corus Pharma.

Pfizer

3Q Revenues: $12.3 billion (+9%)

3Q Earnings: $3.4 billion (+112)

YTD Revenues: $35.8 billion (+3%)

YTD Earnings: $9.9 billion (+85%)

Comments: Lyrica growth continues with worldwide sales reaching $340 million in the quarter compared to $80 million in 3Q2005. Worldwide sales of Lipitor were up 15% to $3.3 billion. Worldwide sales of Celebrex reached $537 million, up 20%. Chantix for smoking-cessation and Exubera, inhalable insulin, were launched in the quarter. The withdrawal of Bextra, beginning in 2005, continued to affect revenues.

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