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Wyeth · 10-Q · For 6/30/04

Filed On 8/9/04 3:32pm ET · SEC File 1-01225 · Accession Number 5187-4-104

  As Of               Filer                 Filing     As/For/On Docs:Pgs

 8/09/04  Wyeth                             10-Q        6/30/04    7:81

Quarterly Report · Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Quarterly Report                                      62    302K 
 2: EX-10.1     Executive Retirement Plan                             11±    45K 
 3: EX-12       Statement re: Computation of Ratios                    2±    10K 
 4: EX-31.1     Certification per Sarbanes-Oxley Act (Section 302)     2     10K 
 5: EX-31.2     Certification per Sarbanes-Oxley Act (Section 302)     2     10K 
 6: EX-32.1     Certification per Sarbanes-Oxley Act (Section 906)     1      6K 
 7: EX-32.2     Certification per Sarbanes-Oxley Act (Section 906)     1      6K

10-Q · Quarterly Report
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (RTF, XML, et al.) Certain Factors That May Affect Future Results Consolidated Condensed Financial Statements: Controls and Procedures Exhibits and Reports on Form 8-K Exhibits and Reports on Form 8-K 58-59 Legal Proceedings Legal Proceedings 49-56 Management's Discussion and Analysis of Financial Condition and Results of Operations 25-47 Quantitative and Qualitative Disclosures about Market Risk Results of Operations Submission of Matters to a Vote of Security Holders
1	1st Page
2	Item 1. Consolidated Condensed Financial Statements:
"	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 25-47
"	Item 1. Legal Proceedings 49-56
"	Item 6. Exhibits and Reports on Form 8-K 58-59
26	Item 2. Results of Operations
41	Certain Factors That May Affect Future Results
49	Item 3. Quantitative and Qualitative Disclosures about Market Risk
"	Item 4. Controls and Procedures
50	Item 1. Legal Proceedings
58	Item 4. Submission of Matters to a Vote of Security Holders
59	Item 6. Exhibits and Reports on Form 8-K

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================================================================================
 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended                     Commission file number 1-1225
June 30, 2004                                                                   

 Wyeth
 -----
(Exact name of registrant as specified in its charter)

Delaware                                      13-2526821  
--------                                      ----------  
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)                                                

Five Giralda Farms, Madison, N.J.                     07940             
---------------------------------                     -----             
(Address of principal executive offices)                (Zip Code)              

Registrant's telephone number, including area code (973) 660-5000               

Indicate by check mark whether the registrant (1) has filed all reports         
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act     
of 1934 during the preceding 12 months (or for such shorter period that the     
registrant was required to file such reports), and (2) has been subject to      
such filing requirements for the past 90 days.      Yes  X        No            
                                        ------        --

Indicate by check mark whether the registrant is an accelerated filer (as       
defined in Rule 12b-2 of the Exchange Act).         Yes  X      No              
                                      ------      --

The number of shares of Common Stock outstanding as of the close of business on 
July 30, 2004:                                                                  

                                               Number of
             Class                                Shares Outstanding
             -----                                ------------------
Common Stock, $0.33-1/3 par value                    1,333,808,583    

================================================================================

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 WYETH

 INDEX

                                                                      Page No.
                                                                      --------

Part I   -  Financial Information (Unaudited)                               2   

Item 1. Consolidated Condensed Financial Statements:          

Consolidated Condensed Balance Sheets -       
                June 30, 2004 and December 31, 2003                      3

   Consolidated Condensed Statements of Operations -
                Three and Six Months Ended June 30, 2004 and 2003        4

 Consolidated Condensed Statements of Changes in
Stockholders' Equity - Six Months Ended   
                June 30, 2004 and 2003                                   5

   Consolidated Condensed Statements of Cash Flows -
                Six Months Ended June 30, 2004 and 2003                  6

               Notes to Consolidated Condensed Financial Statements     7-24

Item 2. Management's Discussion and Analysis of               
                 Financial Condition and Results of Operations         25-47

Item 3. Quantitative and Qualitative Disclosures about        
                 Market Risk                                              48

       Item 4. Controls and Procedures                                    48

Part II  -  Other Information                                               49  

       Item 1. Legal Proceedings                                       49-56

       Item 4. Submission of Matters to a Vote of Security Holders        57

       Item 6. Exhibits and Reports on Form 8-K                        58-59

Signature                                                                   60  

Exhibit Index                                                            EX-1   

Items other than those listed above have been omitted because they are not      
applicable.                                                                     

1 

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Part I - Financial Information
------------------------------

WYETH                                                                           

The consolidated condensed financial statements included herein have been       
prepared by Wyeth (the Company), without audit, pursuant to the rules and       
regulations of the Securities and Exchange Commission (SEC). Certain information
and footnote disclosures normally included in financial statements prepared in  
accordance with accounting principles generally accepted in the United States   
have been condensed or omitted pursuant to such rules and regulations; however, 
the Company believes that the disclosures are adequate to make the information  
presented not misleading. In the opinion of management, the consolidated        
condensed financial statements reflect all adjustments, including those that are
normal and recurring, considered necessary to present fairly the financial      
position of the Company as of June 30, 2004 and December 31, 2003, the results  
of its operations for the three and six months ended June 30, 2004 and 2003, and
changes in stockholders' equity and cash flows for the six months ended June 30,
2004 and 2003. It is suggested that these consolidated condensed financial      
statements and management's discussion and analysis of financial condition and  
results of operations be read in conjunction with the financial statements and  
the notes thereto included in the Company's 2003 Annual Report on Form 10-K,    
Quarterly Report on Form 10-Q for the quarter ended March 31, 2004 and          
information contained in Current Reports on Form 8-K filed since the filing of  
the 2003 Form 10-K.                                                             

We make available through our Company Internet website, free of charge, our     
Company filings with the SEC as soon as reasonably practicable after we         
electronically file them with, or furnish them to, the SEC. The reports we make 
available include Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q,  
Current Reports on Form 8-K, proxy statements, registration statements, and any 
amendments to those documents. The Company's Internet website is www.wyeth.com. 

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                                              WYETH                                              
                              CONSOLIDATED CONDENSED BALANCE SHEETS                              
                             (In Thousands Except Per Share Amounts)                             
                                           (Unaudited)                                           

                                                                   June 30,        December 31,  
                                                                     2004              2003      
                                                                  -----------      ------------  
ASSETS                                                                                           
                                                                                                 
Cash and cash equivalents                                          $4,315,184        $6,069,794  
Marketable securities                                               1,678,643         1,110,297  
Accounts receivable less allowances                                 2,635,054         2,529,613  
Inventories:                                                                                     
     Finished goods                                                   803,563           821,637  
     Work in progress                                               1,229,837         1,141,916  
     Materials and supplies                                           351,231           448,631  
                                                                  -----------      ------------  
                                                                    2,384,631         2,412,184  
Other current assets including deferred taxes                       2,854,054         2,840,354  
                                                                  -----------      ------------  
     Total Current Assets                                          13,867,566        14,962,242  

Property, plant and equipment                                      12,029,364        11,686,252  
     Less accumulated depreciation                                  3,243,511         3,025,201  
                                                                  -----------      ------------  
                                                                    8,785,853         8,661,051  
Goodwill                                                            3,810,140         3,817,993  
Other intangibles, net of accumulated amortization                                               
  (June 30, 2004-$142,458 and December 31, 2003-$128,137)             120,110           133,134  
Other assets including deferred taxes                               3,350,175         3,457,502  
                                                                  -----------      ------------  
     Total Assets                                                 $29,933,844       $31,031,922  
                                                                  ===========      ============  

LIABILITIES                                                                                      
Loans payable                                                        $334,676        $1,512,845  
Trade accounts payable                                                880,554         1,010,749  
Dividends payable                                                     306,771               -    
Accrued expenses                                                    5,239,102         5,461,835  
Accrued federal and foreign taxes                                     344,200           444,081  
                                                                  -----------      ------------  
     Total Current Liabilities                                      7,105,303         8,429,510  

Long-term debt                                                      7,592,038         8,076,429  
Accrued postretirement benefit obligations other than pensions      1,028,910         1,007,540  
Other noncurrent liabilities                                        4,292,605         4,224,062  

Contingencies and commitments (Note 7)                                                           

STOCKHOLDERS' EQUITY                                                                             
$2.00 convertible preferred stock, par value $2.50 per share               41                42  
Common stock, par value $0.33-1/3 per share                           444,572           444,151  
Additional paid-in capital                                          4,797,529         4,764,390  
Retained earnings                                                   4,768,813         4,112,285  
Accumulated other comprehensive loss                                  (95,967)          (26,487) 
                                                                  -----------      ------------  
     Total Stockholders' Equity                                     9,914,988         9,294,381  
                                                                  -----------      ------------  
     Total Liabilities and Stockholders' Equity                   $29,933,844       $31,031,922  
                                                                  ===========      ============  

The accompanying notes are an integral part of these consolidated condensed financial statements.

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                                               WYETH                                               
                          CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS                          
                              (In Thousands Except Per Share Amounts)                              
                                            (Unaudited)                                            

                                                    Three Months                 Six Months        
                                                   Ended June 30,              Ended June 30,      
                                               -----------------------     ----------------------- 
                                                  2004         2003           2004         2003    
                                               ----------   ----------     ----------   ---------- 
                                                                                                   
Net revenue                                    $4,223,205   $3,746,556     $8,237,994   $7,435,613 
                                               ----------   ----------     ----------   ---------- 
Cost of goods sold                              1,130,033    1,019,895      2,227,949    1,948,199 
Selling, general and administrative expenses    1,427,494    1,362,022      2,781,704    2,653,492 
Research and development expenses                 584,255      500,851      1,289,557    1,014,365 
Interest expense, net                              31,896       25,878         58,828       52,878 
Other income, net                                 (13,551)    (270,302)      (127,013)    (263,567)
Gain on sale of Amgen common stock                    -            -              -       (860,554)
                                               ----------   ----------     ----------   ---------- 

Income before federal and foreign taxes         1,063,078    1,108,212      2,006,969    2,890,800 
Provision for federal and foreign taxes           235,733      243,807        429,921      748,513 
                                               ----------   ----------     ----------   ---------- 

Net income                                       $827,345     $864,405     $1,577,048   $2,142,287 
                                               ==========   ==========     ==========   ========== 

Basic earnings per share                            $0.62        $0.65          $1.18        $1.61 
                                               ==========   ==========     ==========   ========== 

Diluted earnings per share                          $0.62        $0.65          $1.18        $1.61 
                                               ==========   ==========     ==========   ========== 

Dividends paid per share of common stock            $0.23        $0.23          $0.46        $0.46 
                                               ==========   ==========     ==========   ========== 

Dividends declared per share of common stock        $0.46        $0.46          $0.69        $0.69 
                                               ==========   ==========     ==========   ========== 

The accompanying notes are an integral part of these consolidated condensed financial statements.  

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                                                                WYETH                                                             
                                CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY                              
                                               (In Thousands Except Per Share Amounts)                                            
                                                             (Unaudited)                                                          

Six Months Ended June 30, 2004:                                                                                                   
                                                  $2.00                                              Accumulated                  
                                               Convertible                Additional                    Other           Total     
                                                Preferred       Common     Paid-in      Retained    Comprehensive   Stockholders' 
                                                  Stock         Stock      Capital      Earnings        Loss           Equity     
                                               -----------     --------   ----------   ----------   -------------   ------------- 
                                                                                                                                  
Balance at January 1, 2004                             $42     $444,151   $4,764,390   $4,112,285        $(26,487)     $9,294,381 

Net income                                                                              1,577,048                       1,577,048 
Currency translation adjustments                                                                          (83,008)        (83,008)
Unrealized gains on derivative contracts, net                                                              26,159          26,159 
Unrealized losses on marketable securities, net                                                           (12,631)        (12,631)
                                                                                                                    ------------- 
     Comprehensive income, net of tax                                                                                   1,507,568 
                                                                                                                    ------------- 

Cash dividends declared (1)                                                              (920,083)                       (920,083)
Common stock issued for stock options                               327       25,257                                       25,584 
Other exchanges                                         (1)          94        7,882         (437)                          7,538 
                                               -----------     --------   ----------   ----------   -------------   ------------- 
Balance at June 30, 2004                               $41     $444,572   $4,797,529   $4,768,813        $(95,967)     $9,914,988 
                                               ===========     ========   ==========   ==========   =============   ============= 

Six Months Ended June 30, 2003:                                                                                                   
                                                  $2.00                                              Accumulated                  
                                               Convertible                Additional                    Other           Total     
                                                Preferred       Common     Paid-in      Retained    Comprehensive   Stockholders' 
                                                  Stock         Stock      Capital      Earnings        Loss           Equity     
                                               -----------     --------   ----------   ----------   -------------   ------------- 
Balance at January 1, 2003                             $46     $442,019   $4,582,773   $3,286,645       $(155,571)     $8,155,912 

Net income                                                                              2,142,287                       2,142,287 
Currency translation adjustments                                                                          421,842         421,842 
Unrealized losses on derivative contracts, net                                                            (14,014)        (14,014)
Unrealized gains on marketable securities, net                                                              6,206           6,206 
Realized gain on sale of Amgen stock                                                                                              
  reclassified to net income                                                                             (515,114)       (515,114)
                                                                                                                    ------------- 
     Comprehensive income, net of tax                                                                                   2,041,207 
                                                                                                                    ------------- 

Cash dividends declared (2)                                                              (916,761)                       (916,761)
Common stock issued for stock options                             1,617       87,489                                       89,106 
Other exchanges                                         (2)          57       17,202       (1,908)                         15,349 
                                               -----------     --------   ----------   ----------   -------------   ------------- 
Balance at June 30, 2003                               $44     $443,693   $4,687,464   $4,510,263       $(256,651)     $9,384,813 
                                               ===========     ========   ==========   ==========   =============   ============= 

(1) Included in cash dividends declared were the following dividends payable at June 30, 2004:                                    
    - Common stock cash dividend of $0.23 per share ($306,755 in the aggregate) declared on June 16, 2004 and payable on          
      September 1, 2004; and                                                                                                      
    - Preferred stock cash dividends of $0.50 per share ($16 in the aggregate) declared on April 22, 2004 and paid on             
      July 1, 2004 and declared on June 16, 2004 and payable on October 1, 2004.                                                  

(2) Included in cash dividends declared were the following dividends payable at June 30, 2003:                                    
    - Common stock cash dividend of $0.23 per share ($306,148 in the aggregate) declared on June 25, 2003 and paid on             
      September 1, 2003; and                                                                                                      
    - Preferred stock cash dividends of $0.50 per share ($18 in the aggregate) declared on April 24, 2003 and paid on             
      July 1, 2003 and declared on June 25, 2003 and paid on October 1, 2003.                                                     

The accompanying notes are an integral part of these consolidated condensed financial statements.                                 

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                                               WYETH                                              
                          CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS                         
                                          (In Thousands)                                          
                                            (Unaudited)                                           

                                                                               Six Months         
                                                                             Ended June 30,       
                                                                       -------------------------- 
                                                                          2004            2003    
                                                                       ----------      ---------- 
Operating Activities                                                                              
--------------------                                                                              
                                                                                                  
Net income                                                             $1,577,048      $2,142,287 
Adjustments to reconcile net income to net cash                                                   
  provided by operating activities:                                                               
   Gain on sale of Amgen shares                                               -          (860,554)
   Gains on sales of assets                                              (167,165)       (290,154)
   Depreciation and amortization                                          301,076         262,589 
   Change in deferred income taxes                                         94,039          (7,344)
   Diet drug litigation payments                                         (255,173)       (248,434)
   Security fund deposit                                                      -          (535,200)
   Changes in working capital, net                                       (588,124)        459,299 
   Other items, net                                                       243,185          27,891 
                                                                       ----------      ---------- 
Net cash provided by operating activities                               1,204,886         950,380 
                                                                       ----------      ---------- 

Investing Activities                                                                              
--------------------                                                                              
Purchases of property, plant and equipment                               (589,227)       (792,265)
Proceeds from sale of Amgen common stock                                      -         1,579,917 
Proceeds from sales of assets                                             315,921         317,973 
Proceeds from sales and maturities of marketable securities               374,596         485,306 
Purchases of marketable securities                                       (959,459)       (609,717)
                                                                       ----------      ---------- 
Net cash provided by (used for) investing activities                     (858,169)        981,214 
                                                                       ----------      ---------- 

Financing Activities                                                                              
--------------------                                                                              
Net repayments of commercial paper                                            -        (3,329,485)
Proceeds from issuance of long-term debt                                      -         1,800,000 
Repayments of long-term debt                                           (1,500,000)            -   
Other borrowing transactions, net                                          (6,720)        (26,573)
Dividends paid                                                           (613,312)       (610,595)
Exercises of stock options                                                 25,584          89,106 
                                                                       ----------      ---------- 
Net cash used for financing activities                                 (2,094,448)     (2,077,547)
                                                                       ----------      ---------- 
Effect of exchange rate changes on cash and cash equivalents               (6,879)         18,969 
                                                                       ----------      ---------- 
Decrease in cash and cash equivalents                                  (1,754,610)       (126,984)
Cash and cash equivalents, beginning of period                          6,069,794       2,943,604 
                                                                       ----------      ---------- 
Cash and cash equivalents, end of period                               $4,315,184      $2,816,620 
                                                                       ==========      ========== 

Supplemental Information                                                                          
------------------------                                                                          
Interest payments                                                        $106,625        $160,510 
Income tax payments, net of refunds                                       424,123         312,927 

The accompanying notes are an integral part of these consolidated condensed financial statements. 

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

Note 1.   Summary of Significant Accounting Policies                            
------------------------------------------                  

          The following policies are required interim updates to those disclosed
in Footnote 1 of the 2003 Annual Report on Form 10-K:       

         Stock-Based Compensation: The Company has three Stock Incentive Plans
       that it accounts for using the intrinsic value method in accordance
          with APB Opinion No. 25, Accounting for Stock Issued to Employees. All
         options granted under these plans have an exercise price equal to the
     market value of the underlying common stock on the date of grant.
          Accordingly, no stock-based employee compensation cost is reflected in
        net income other than for the Company's restricted stock awards. The
         following table illustrates the effect on net income and earnings per
          share if the Company had applied the fair value recognition provisions
          of SFAS No. 123, Accounting for Stock-Based Compensation as amended by
          SFAS No. 148, Accounting for Stock-Based Compensation - Transition and
  Disclosure, Amendment of SFAS No. 123, to stock-based employee
compensation:                                               

                                                        · Enlarge/Download Table
                                                                                                      
                                                                                            
                                                Three Months              Six Months        
                                               Ended June 30,           Ended June 30,      
                                            --------------------   ------------------------ 
(In thousands except per share amounts)       2004        2003        2004          2003    
------------------------------------------  --------    --------   ----------    ---------- 
                                                                                            
Net income, as reported                     $827,345    $864,405   $1,577,048    $2,142,287 
Add: Stock-based employee compensation                                                      
  expense included in reported net income,                                                  
  net of tax                                   3,875       6,763        6,368         8,079 
Deduct: Total stock-based employee                                                          
  compensaton expense determined                                                            
  under fair value-based method for all                                                     
  awards, net of tax                         (76,185)    (79,941)    (161,328)     (163,632)
                                            --------    --------   ----------    ---------- 

Adjusted net income                         $755,035    $791,227   $1,422,088    $1,986,734 
                                            ========    ========   ==========    ========== 

Earnings per share:                                                                         
  Basic - as reported                          $0.62       $0.65        $1.18         $1.61 
                                            ========    ========   ==========    ========== 
  Basic - adjusted                             $0.57       $0.60        $1.07         $1.50 
                                            ========    ========   ==========    ========== 

  Diluted - as reported                        $0.62       $0.65        $1.18         $1.61 
                                            ========    ========   ==========    ========== 
  Diluted - adjusted                           $0.56       $0.59        $1.06         $1.49 
                                            ========    ========   ==========    ========== 
                                                                      
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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

    Goodwill and Other Intangibles: In accordance with SFAS No. 142,
     Goodwill and Other Intangible Assets, the changes in the carrying
          amount of goodwill by reportable segment for the six months ended June
30, 2004 are as follows:                                    

                                                        · Enlarge/Download Table
                                                                                               
                                                                                     
                                                    Consumer    Animal               
(In thousands)                    Pharmaceuticals  Healthcare   Health      Total    
--------------------------------  ---------------  ----------  --------   ---------- 
                                                                                     
Balance at December 31, 2003        $2,691,772      $592,526   $533,695   $3,817,993 
Currency translation adjustments        (7,455)         (243)      (155)      (7,853)
                                    ----------      --------   --------   ---------- 
Balance at June 30, 2004            $2,684,317      $592,283   $533,540   $3,810,140 
                                    ==========      ========   ========   ========== 
                                                                      
The Company's other intangibles consist primarily of license
          agreements which are being amortized over their estimated useful lives
ranging from three to 10 years.                             

Note 2.   Earnings per Share                                                    
------------------                                          

         The following table sets forth the computations of basic earnings per
share and diluted earnings per share:                       

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                                              Three Months              Six Months       
                                             Ended June 30,           Ended June 30,     
                                         ----------------------  ------------------------
(In thousands except per share amounts)    2004         2003        2004          2003   
---------------------------------------  ---------    ---------  ----------    ----------

                                                                                         
Net income less preferred dividends       $827,329     $864,387  $1,577,024    $2,142,260
Denominator:                                                                             
  Weighted average common shares                                                         
    outstanding                          1,333,505    1,329,333   1,333,215     1,328,238
                                         ---------    ---------  ----------    ----------

Basic earnings per share                     $0.62        $0.65       $1.18         $1.61
                                         =========    =========  ==========    ==========

Net income                                $827,345     $864,405  $1,577,048    $2,142,287
Denominator:                                                                             
  Weighted average common shares                                                         
    outstanding                          1,333,505    1,329,333   1,333,215     1,328,238
  Common stock equivalents of                                                            
    outstanding stock options and                                                        
    deferred contingent common stock                                                     
    awards*                                  3,646        5,853       4,232         5,068
                                         ---------    ---------  ----------    ----------
Total shares*                            1,337,151    1,335,186   1,337,447     1,333,306
                                         ---------    ---------  ----------    ----------

Diluted earnings per share*                  $0.62        $0.65       $1.18         $1.61
                                         =========    =========  ==========    ==========
                                                                      
        *    At June 30, 2004 and 2003, 128,502 and 86,789, respectively, of
              common shares related to options outstanding under the Company's
         Stock Incentive Plans were excluded from the computation of
       diluted earnings per share, as the effect would have been
antidilutive.                                     

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

Note 3.   Marketable Securities                                                 
---------------------                                       

    The Company has marketable debt and equity securities, which are
          classified as either available-for-sale or held-to-maturity, depending
       on management's investment intentions relating to these securities.

The cost, gross unrealized gains (losses) and fair value of 
        available-for-sale and held-to-maturity securities by major security
type at June 30, 2004 and December 31, 2003 were as follows:

                                                                · Download Table
                                                                                             
                                                                                   
                                                  Gross       Gross                
(In thousands)                                  Unrealized  Unrealized     Fair    
At June 30, 2004                       Cost       Gains      (Losses)      Value   
----------------------------------  ----------  ----------  ----------   ----------
                                                                                   
Available-for-sale:                                                                
   U.S. Treasury securities            $81,063         $25       $(599)     $80,489
   Commercial paper                     50,742         -           (11)      50,731
   Certificates of deposit             114,585          11        (169)     114,427
   Corporate debt securities           196,131         122        (169)     196,084
   Other debt securities                 2,527         -           (15)       2,512
   Equity securities                    47,493       7,083      (4,813)      49,763
   Institutional fixed income fund     528,550      15,883      (2,967)     541,466
                                    ----------  ----------  ----------   ----------
Total available-for-sale             1,021,091      23,124      (8,743)   1,035,472
                                    ----------  ----------  ----------   ----------
Held-to-maturity:                                                                  
   Commercial paper                    449,493         -           -        449,493
   Certificates of deposit             144,461         -           -        144,461
   Other debt securities                49,217         -           -         49,217
                                    ----------  ----------  ----------   ----------
Total held-to-maturity                 643,171         -           -        643,171
                                    ----------  ----------  ----------   ----------
                                    $1,664,262     $23,124     $(8,743)  $1,678,643
                                    ==========  ==========  ==========   ==========

                                                  Gross       Gross                
(In thousands)                                  Unrealized  Unrealized     Fair    
At December 31, 2003                   Cost       Gains      (Losses)      Value   
----------------------------------  ----------  ----------  ----------   ----------
Available-for-sale:                                                                
   U.S. Treasury securities           $152,851         $44        $(23)    $152,872
   Commercial paper                     42,964           4          (4)      42,964
   Certificates of deposit              63,643          22         (27)      63,638
   Corporate debt securities           212,198         252         (32)     212,418
   Other debt securities                 4,296         -           (11)       4,285
   Equity securities                    21,078      13,158        (188)      34,048
   Institutional fixed income fund     522,847      16,868         -        539,715
                                    ----------  ----------  ----------   ----------
Total available-for-sale             1,019,877      30,348        (285)   1,049,940
                                    ----------  ----------  ----------   ----------
Held-to-maturity:                                                                  
   Commercial paper                     60,107         -           -         60,107
   Certificates of deposit                 250         -           -            250
                                    ----------  ----------  ----------   ----------
Total held-to-maturity                  60,357         -           -         60,357
                                    ----------  ----------  ----------   ----------
                                    $1,080,234     $30,348       $(285)  $1,110,297
                                    ==========  ==========  ==========   ==========
                                                                      
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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

The contractual maturities of debt securities classified as 
available-for-sale at June 30, 2004 were as follows:        

                                                                      Fair
        (In thousands)                                    Cost         Value
          ----------------------------------------        --------      --------
Available-for-sale:                                         
             Due within one year                          $266,809      $266,613
             Due after one year through five years         167,098       166,505
           Due after five years through 10 years             -             -
             Due after 10 years                             11,141        11,125
                                                          --------      --------
                                                          $445,048      $444,243
                                                          ========      ========

        All held-to-maturity debt securities are due within one year and had
aggregate fair values of $643.2 million at June 30, 2004.   

Note 4.   New Credit Facility                                                   
-------------------                                         

        In February 2004, the Company replaced its $1,350.0 million, 364-day
       credit facility entered into in March 2003 with a $1,747.5 million,
         five-year facility. The new facility contains substantially identical
          financial and other covenants, representations, warranties, conditions
and default provisions as the replaced facility.            

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

Note 5.   Pensions and Other Postretirement Benefits                            
------------------------------------------                  

          In accordance with SFAS No. 132 (revised 2003), Employers' Disclosures
          about Pensions and Other Postretirement Benefits, an amendment of FASB
   Statement Nos. 87, 88, and 106, the following pension and other
       postretirement benefit plan disclosures are now required in interim
financial statements.                                       

         Net periodic benefit cost for the Company's defined benefit plans for
      the three and six months ended June 30, 2004 and 2003 (principally
U.S.) was as follows:                                       

                                                        · Enlarge/Download Table
                                                                                                   
                                                                                         
                                                            Pensions                     
                                         ----------------------------------------------- 
                                            Three Months                Six Months       
                                           Ended June 30,             Ended June 30,     
(In thousands)                           -------------------       --------------------- 
Components of Net Periodic Benefit Cost   2004        2003           2004         2003   
---------------------------------------  -------     -------       --------     -------- 
                                                                                         
Service cost                             $38,172     $29,627        $73,543      $59,380 
Interest cost                             65,896      62,465        128,189      124,435 
Expected return on plan assets           (78,843)    (67,617)      (155,147)    (135,046)
Amortization of prior service cost         2,834       2,763          5,677        5,515 
Amortization of transition obligation       (405)       (373)          (827)        (752)
Recognized net actuarial loss             27,691      26,081         50,154       52,128 
Settlement loss                              -           -              -         13,034 
                                         -------     -------       --------     -------- 
Net periodic benefit cost                $55,345     $52,946       $101,589     $118,694 
                                         =======     =======       ========     ======== 
                                                                      
                                                        · Enlarge/Download Table
                                                                                                 
                                                                                       
                                                 Other Postretirement Benefits         
                                         --------------------------------------------- 
                                            Three Months               Six Months      
                                           Ended June 30,            Ended June 30,    
(In thousands)                           -------------------       ------------------- 
Components of Net Periodic Benefit Cost   2004        2003          2004        2003   
---------------------------------------  -------     -------       -------     ------- 
                                                                                       
Service cost                             $10,550      $9,524       $21,695     $19,039 
Interest cost                             22,613      23,572        46,173      47,118 
Amortization of prior service cost        (4,478)       (563)       (8,187)     (1,125)
Recognized net actuarial loss              3,771       4,676        11,611       9,347 
                                         -------     -------       -------     ------- 
Net periodic benefit cost                $32,456     $37,209       $71,292     $74,379 
                                         =======     =======       =======     ======= 
                                                                      
         As of June 30, 2004, $19.8 million and $50.1 million of contributions
         have been made in 2004 to the Company's defined benefit pension plans
     and other postretirement benefit plans, respectively. The Company
       presently anticipates further contributions of approximately $256.0
     million and $90.0 million to fund its defined benefit pension and
other postretirement benefit plans in 2004.                 

       The Financial Accounting Standards Boards (FASB) Staff Position No.
         106-2, Accounting and Disclosure Requirements Related to the Medicare
     Prescription Drug, Improvement and Modernization Act of 2003, was
         recently issued to provide guidance on the accounting for the effects
        of the Medicare Prescription Drug, Improvement and Modernization Act
         of 2003 (the Act). The Act provides for a federal subsidy to sponsors
          of retiree health care benefit plans that provide a benefit that is at
least actuarially                                           

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

         equivalent to Medicare Part D. The federal subsidy is based on 28% of
      an individual beneficiary's annual prescription drug costs between
         $250 and $5,000 (subject to indexing and the provisions of the Act as
   to "allowable retiree costs"). Wyeth provides prescription drug
          coverage to retirees meeting certain age and service requirements. For
          retirees covered under the plan, the Company's management believes the
         coverage provided by Wyeth affords retirees lower out-of-pocket costs
         than would result if coverage were provided under Medicare Part D. As
        such, the Company's management has concluded that Wyeth's plan is at
least actuarially equivalent to Medicare Part D.            

     The Company adopted FASB Staff Position No. 106-2 during the 2004
     second quarter. Accordingly, the Company's postretirement benefit
    obligation has been remeasured as of January 1, 2004 in order to
       reflect the impact of the Act. As a result of the remeasurement, an
   unrecognized actuarial gain was realized during the 2004 second
   quarter, which reduced the Company's accumulated postretirement
         benefit obligation by approximately $195.4 million. This unrecognized
          actuarial gain is being amortized over the average working life (which
  approximates 10 years) of the Company's employees eligible for
        postretirement benefits beginning January 1, 2004. The effect of the
   Act also decreased the Company's 2004 first half postretirement
   benefits expense by approximately $15.4 million. This reduction
          consisted of lower service and interest costs of $3.0 million and $6.1
    million, respectively, as well as decreased amortization of $6.3
million related to recognized actuarial losses.             

Note 6.   Restructuring Program                                                 
---------------------                                       

2003 Restructuring Charge and Related Asset Impairments     

In December 2003, the Company recorded a special charge for 
        manufacturing restructurings and related asset impairments of $487.9
million. The Company recorded these restructuring charges,  
         including personnel and other costs, in accordance with SFAS No. 146,
         Accounting for Costs Associated with Exit or Disposal Activities, and
         its asset impairments in accordance with SFAS No. 144, Accounting for
      the Impairment of Long-Lived Assets. The restructuring charges and
       related asset impairments impacted only the Pharmaceuticals segment
and were recorded to recognize the costs of closing certain 
   manufacturing facilities, as well as the elimination of certain
   positions at the Company's facilities. As of June 30, 2004, the
  Company is continuing with the 2003 restructuring program. The
      majority of the contract settlement costs are scheduled to be paid
         over an extended period of time based on the contractual terms of the
agreements, which extend through 2005.                      

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

The activity in the restructuring accruals was as follows:  

                                                                · Download Table
                                                                                   
                                                                         
                                       Reserve at  Payments/   Reserve at
(In thousands)               Total   December 31,   Non-cash     June 30,
2003 Restructuring          Charges          2003    Charges         2004
-------------------------  --------  ------------  ---------   ----------
                                                                         
Personnel costs              $3,400        $3,400    $(2,700)        $700
Asset impairments           419,400           -          -            -  
Contract settlement costs    47,900        45,200     (4,300)      40,900
Other closure/exit costs     17,200        17,200    (16,300)         900
                           --------  ------------  ---------   ----------
                           $487,900       $65,800   $(23,300)     $42,500
                           ========  ============  =========   ==========
                                                                      
2002 Restructuring Charge and Related Asset Impairments     

In December 2002, the Company recorded a special charge for 
    restructuring and related asset impairments of $340.8 million to
       recognize the costs of closing certain manufacturing facilities and
  two research facilities, as well as the elimination of certain
     positions at the Company's facilities. The Company recorded these
         asset impairments in accordance with SFAS No. 144, Accounting for the
     Impairment or Disposal of Long-Lived Assets and its restructuring
         charges, including personnel and other costs, in accordance with EITF
    No. 94-3, Liability Recognition for Certain Employee Termination
         Benefits and Other Costs to Exit an Activity (including Certain Costs
Incurred in a Restructuring).                               

  The restructuring will ultimately result in the elimination of
         approximately 3,150 positions worldwide. The reductions in workforce,
   which are permanent and affected all of the Company's segments,
         including Corporate, are substantially complete. As of June 30, 2004,
      the Company is continuing with the 2002 restructuring program. The
       timing of the remaining personnel costs to be paid has been delayed
      since, in many instances, the terminated employees elected or were
        required to receive their severance payments over an extended period
          of time. However, substantially all of the payments are expected to be
       made during 2004. The activity in the restructuring accruals was as
follows:                                                    

                                                                · Download Table
                                                                                  
                                                                        
                                                  Payments/             
                                      Reserve at   Non-cash   Reserve at
(In thousands)               Total  December 31,    Charges     June 30,
2002 Restructuring         Charges          2003    in 2004         2004
------------------------  --------  ------------  ---------   ----------
                                                                        
Personnel costs           $194,600       $36,800   $(17,500)     $19,300
Asset impairments           68,700           -          -            -  
Other closure/exit costs    77,500        27,900    (11,200)      16,700
                          --------  ------------  ---------   ----------
                          $340,800       $64,700   $(28,700)     $36,000
                          ========  ============  =========   ==========
                                                                      
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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

Note 7.   Contingencies and Commitments                                         
-----------------------------                               

   The Company is involved in various legal proceedings, including
       product liability and environmental matters, of a nature considered
    normal to its business. It is the Company's policy to accrue for
   amounts related to these legal matters if it is probable that a
      liability has been incurred and an amount is reasonably estimable.

    In the opinion of the Company, although the outcome of any legal
          proceedings cannot be predicted with certainty, the ultimate liability
       of the Company in connection with its legal proceedings (other than
         the diet drug litigation discussed immediately below) will not have a
         material adverse effect on the Company's financial position but could
     be material to the results of operations or cash flows in any one
accounting period.                                          

       The Company has been named as a defendant in numerous legal actions
  relating to the diet drugs PONDIMIN (which in combination with
         phentermine, a product that was not manufactured, distributed or sold
     by the Company, was commonly referred to as "fen-phen") or REDUX,
        which the Company estimated were used in the United States, prior to
        their 1997 voluntary market withdrawal, by approximately 5.8 million
     people. These actions allege, among other things, that the use of
REDUX and/or PONDIMIN, independently or in combination with 
      phentermine, caused certain serious conditions, including valvular
heart disease.                                              

       On October 7, 1999, the Company announced a nationwide class action
         settlement (the settlement) to resolve litigation brought against the
      Company regarding the use of the diet drugs REDUX or PONDIMIN. The
    settlement covered all claims arising out of the use of REDUX or
        PONDIMIN, except for claims of primary pulmonary hypertension (PPH),
     and was open to all REDUX or PONDIMIN users in the United States.

         The number of individuals who have filed claims within the settlement
          that allege significant heart valve disease (known as "matrix" claims)
       has been higher than had been anticipated. The settlement agreement
         grants the Company access to claims data maintained by the settlement
    trust (the Trust). Based on its review of that data, the Company
 understands that, as of July 14, 2004, the Trust had recorded
  approximately 116,710 matrix claim forms. Approximately 31,380
        of these forms were so deficient, incomplete or duplicative of other
       forms filed by the same claimant that, in the Company's view, it is
    unlikely that a significant number of these forms will result in
further claims processing.                                  

The Company's understanding of the status of the remaining  
      approximately 85,330 forms, based on its analysis of data received
      from the Trust through July 14, 2004, is as follows. Approximately
      19,200 of the matrix claims had been processed to completion, with
    those claims either paid (approximately 3,330 payments, totaling
      $1,230.1 million, had been made to approximately 3,190 claimants),
 denied or in show cause proceedings (approximately 14,340) or
        withdrawn. Approximately 2,760 claims were in some stage of the 100%
          audit process ordered in late 2002 by the federal court overseeing the

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

national settlement. Approximately 16,980 claims alleged    
     conditions that, if true, would entitle the claimant to receive a
     matrix award; these claims had not yet entered the audit process.
          Another approximately 23,730 claims with similar allegations have been
       purportedly substantiated by physicians or filed by law firms whose
         claims are now subject to the outcome of the Trust's Claims Integrity
      Program, discussed below. Approximately 22,490 claim forms did not
          contain sufficient information even to assert a matrix claim, although
         some of those claim forms could be made complete by the submission of
         additional information and could therefore become eligible to proceed
          to audit in the future. The remaining approximately 170 claims were in
the data entry process and could not be assessed.           

      In addition to the approximately 116,710 matrix claims filed as of
      July 14, 2004, additional class members may progress to the matrix
        stage through 2015 if they develop a matrix condition in the future,
        have registered with the Trust by May 3, 2003, and have demonstrated
      FDA+ regurgitation (i.e., mild or greater aortic regurgitation, or
          moderate or greater mitral regurgitation) or mild mitral regurgitation
          on an echocardiogram conducted after diet drug use and obtained either
 outside of the Trust by January 3, 2003 or within the Trust's
screening program.                                          

      The Company's understanding, based on data received from the Trust
     through July 14, 2004, is that audits had produced preliminary or
      final results on 4,396 of the claims that had begun the 100% audit
         process since its inception. Of these, 1,539 were found to be payable
     at the amount claimed and 137 were found to be payable at a lower
 amount than had been claimed. The remaining claims were found
      ineligible for a matrix payment, although the claimants may appeal
      that determination to the federal court overseeing the settlement.
     Because of numerous issues concerning the audit process raised in
         motions and related proceedings now pending before the federal court,
         the Company cannot predict the ultimate outcome of the audit process.

        Both the volume and types of claims seeking matrix benefits received
   by the Trust to date differ materially from the epidemiological
         projections on which the court's approval of the settlement agreement
          was predicated. Based upon data received from the Trust, approximately
     93% of the 16,980 matrix claimants who allege conditions that, if
      true, would entitle them to an award (and approximately 98% of the
        approximately 23,730 claims certified by physicians and/or law firms
     currently subject to the Trust's Integrity Program) seek an award
        under Level II of the five-level settlement matrix. (Level II covers
      claims for moderate or severe mitral or aortic valve regurgitation
       with complicating factors; depending upon the claimant's age at the
     time of diagnosis, and assuming no factors are present that would
        place the claim on one of the settlement's reduced payment matrices,
 awards under Level II ranged from $192,111 to $643,500 on the
settlement agreement's payment matrix.)                     

    An ongoing investigation, which the Company understands is being
          conducted by counsel for the Trust, and discovery conducted to date by
        the Company in connection with certain Intermediate and Back-End opt
out cases (brought by some of the same                      

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

         lawyers who have filed these Level II claims and supported by some of
       the same cardiologists who have certified the Level II claims) cast
      substantial doubt on the merits of many of these matrix claims and
        their eligibility for a matrix payment from the Trust. Therefore, in
     addition to the 100% audit process, the Trust has embarked upon a
         Claims Integrity Program, which is designed to protect the Trust from
paying illegitimate or fraudulent claims.                   

    Pursuant to the Claims Integrity Program, the Trust has required
additional information concerning matrix claims purportedly 
          substantiated by 18 identified physicians or filed by two law firms in
          order to determine whether to permit those claims to proceed to audit.
      Based upon data obtained from the Trust, the Company believes that
        approximately 23,730 matrix claims were purportedly substantiated by
      the 18 physicians and/or filed by the two law firms covered by the
     Claims Integrity Program as of July 14, 2004. It is the Company's
    understanding that additional claims substantiated by additional
         physicians or filed by additional law firms might be subjected to the
          same requirements of the Claims Integrity Program in the future. As an
        initial step in the integrity review process, each of the identified
       physicians has been asked to complete a comprehensive questionnaire
          regarding each claim and the method by which the physician reached the
        conclusion that it was valid. The ultimate disposition of any or all
      claims that are subject to the Claims Integrity Program is at this
         time uncertain. Counsel for certain claimants affected by the program
 have challenged the Trust's authority to implement the Claims
    Integrity Program and to require completion of the questionnaire
          before determining whether to permit those claims to proceed to audit.
       While that motion was denied by the court, additional challenges to
the Claims Integrity Program and to the Trust's matrix claim
processing have been filed.                                 

        In late 2003, the Trust adopted a program to prioritize the handling
   of those matrix claims that it believed were least likely to be
      illegitimate. Under the program, claims under Levels III, IV and V
      were to be processed and audited on an expedited basis. (Level III
        covers claims for heart valve disease requiring surgery to repair or
       replace the valve, or conditions of equal severity. Levels IV and V
          cover complications from, or more serious conditions than, heart valve
          surgery.) The program prioritized the auditing of, inter alia, Level I
          claims, all claims filed by a claimant without counsel (i.e., on a pro
      se basis) and Level II claims substantiated by physicians who have
attested to fewer than 20 matrix claims.                    

          On April 15, 2004, the Trust announced that it would cease temporarily
   to audit or act on audit results of Level I and Level II matrix
      claims. The Trust stated that it would continue to initiate audits
        with respect to Level III, IV and V matrix claims and would continue
          to act on the results of audits of Level III, IV and V claims. It also
announced that "[d]ue to concerns about the manner in which 
         echocardiograms have been taken, recorded and presented, the Trust is
        reviewing all echocardiograms and related materials prior to payment
   of claims on which they are based and, where possible, prior to
        initiation of a medical audit. This will result in a temporary delay
          in initiating audits and in payments following audit. Where the review
of the echocardiogram reveals substantial                   

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

          evidence of an intentional, material misrepresentation that calls into
        question the validity of a claim, the Trust will not pay the claim."

      In a joint motion filed in the U.S. District Court for the Eastern
         District of Pennsylvania on May 4, 2004, the Company, counsel for the
         plaintiff class in the nationwide settlement and counsel for a number
        of individual class members moved to stay for 60 days the processing
 and payment of Level I and Level II matrix claims and certain
         associated court proceedings. That motion was granted by the court on
      May 10, 2004. The stay was intended to provide the parties with an
       opportunity to draft and submit to the court a Seventh Amendment to
      the settlement agreement that would create a new claims processing
         structure, funding arrangement and payment schedule for these claims.
     On July 13, 2004, the District Court extended the stay, which had
         expired on July 9, 2004, until July 21, 2004. On July 21, the parties
         informed the Court that an agreement had been reached on the terms of
      the proposed Seventh Amendment and that the parties had placed the
        signed agreement in escrow with the Court's Special Master while the
  parties finalized the exhibits to the agreement, including the
      proposed Form of Notice to the class. At the parties' request, the
        Court extended the stay on the processing and payment of Level I and
         Level II claims until August 4, 2004. On August 5, the stay was again
       extended, through August 10, 2004. If the parties file a motion for
        preliminary approval of the proposed Seventh Amendment by August 10,
    the stay will automatically be extended until the District Court
enters an order granting or denying that motion.            

  The proposed Seventh Amendment would require preliminary court
         approval, notice to the class and an opportunity for class members to
    opt out of the Seventh Amendment process, final agreement by the
        Company following the opt out period, trial court approval and final
      judicial approval. If finalized and approved, the proposed Seventh
Amendment would include the following key terms:            

  o    The amendment would create a new Supplemental Fund, to be
               administered by a Fund Administrator who will be appointed by the
          District Court and who will process the Level I and Level II
matrix claims;                                    

          o    The Company would make initial payments of up to $50.0 million to
              facilitate the establishment of the Supplemental Fund. Following
             approval by the federal court overseeing the settlement and any
            appellate courts, the Company would make an initial payment of
        $400.0 million. The timing of additional payments would be
              dictated by the rate of review and payment of claims by the Fund
            Administrator. The Company would ultimately deposit a total of
             $1,275.0 million, net of certain credits, into the Supplemental
Fund;                                             

          o    All current matrix Level I and II claimants who qualify under the
              Seventh Amendment, who pass the Settlement Fund's medical review
          and who otherwise satisfy the requirements of the settlement
    would receive a pro rata share of the $1,275.0 million
              Supplemental Fund, after deduction of certain expenses and other
           amounts from the Supplemental Fund. The pro rata amount would
          vary depending upon the number of claimants who pass medical
              review, the nature of their claims, their age and other factors.
A Seventh Amendment participant who               

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

               does not qualify for a payment after such medical review would be
paid $2,000 from the Supplemental Fund;           

      o    Participating class members who would in the future have been
          eligible to file Level I and Level II matrix claims would be
             eligible to receive a $2,000 payment from the settlement Trust;
               such payments would be funded by the Company apart from its other
funding obligations under the national settlement;

     o    If the participants in the Seventh Amendment have surgery or
             other more serious medical conditions on Matrix Levels III-V by
           the earlier of fifteen years from the date of their last diet
       drug ingestion or by December 31, 2011, they would remain
               eligible to submit claims to the existing settlement Trust and be
               paid the current matrix amounts if they qualify for such payments
             under terms modified by the Seventh Amendment. In the event the
          existing settlement Trust is unable to pay those claims, the
Company would guarantee payment; and              

     o    Class members would have the right to opt out of the Seventh
        Amendment and to remain bound by the terms of the existing
             national settlement. The Company, however, would have the right
              to withdraw from the Seventh Amendment if participation by class
               members is inadequate or for other reasons. All class members who
            participate in the Seventh Amendment would give up any further
          opt-out rights. Approval of the Seventh Amendment would also
              preclude any lawsuits by the Trust or the Company to recover any
               amounts previously paid to class members by the Trust, as well as
               terminate the Claims Integrity Program as to all claimants who do
not opt out of the Seventh Amendment.             

      There can be no assurance that the Company will ultimately proceed
    with the amendment (based upon the level of participation in the
  amendment or for other reasons), or that the amendment will be
approved by the court and upheld on appeal.                 

         The Trust has indicated that one of the goals of the Claims Integrity
        Program referenced above is to recoup funds from those entities that
       caused the Trust to pay illegitimate claims and the Trust has filed
 two lawsuits to that end. The Trust has filed a suit alleging
    violations of the Racketeer Influenced and Corrupt Organizations
         (RICO) Act against a Kansas City cardiologist who attested under oath
          to the validity of over 2,500 matrix claims. The suit alleges that the
   cardiologist intentionally engaged in a pattern of racketeering
     activity to defraud the Trust. The Trust has also filed a lawsuit
  against a New York cardiologist who attested under oath to the
        validity of 83 matrix claims, alleging that the cardiologist engaged
          in, among other things, misrepresentation, fraud, conspiracy to commit
fraud, and gross negligence.                                

          The Trust has filed a number of motions directed at the conduct of the
     companies that performed the echocardiograms on which many matrix
         claims are based. In a pair of motions related to the activities of a
      company known as EchoMotion, the Trust has asked the court to stay
      payment of claims already audited and found payable in whole or in
 part if the echocardiogram was performed by EchoMotion and to
       disqualify all echocardiograms by EchoMotion that have been used to
          support matrix claims that have not yet been audited. In addition, the
Trust has filed a motion seeking discovery of 14            

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

      specific companies whose echocardiograms support a large number of
       claims to determine whether their practices violate the settlement.
        The Trust has also moved to stay and/or disqualify claims brought by
        claimants represented by certain law firms or attested to by certain
          physicians. The Company has joined in certain of these motions and has
   filed its own motions addressing the abuse of the matrix claims
     process and seeking an emergency stay of claim processing. All of
       these motions, as well as the Trust lawsuits referenced above, have
     also been stayed pending the resolution of the outstanding issues
          involving the proposed Seventh Amendment. As indicated above, approval
    of the Seventh Amendment would result in the withdrawal of these
        motions as to claimants who do not opt out of the Seventh Amendment.

      The Company continues to monitor the progress of the Trust's audit
          process and its Claims Integrity Program. Even if substantial progress
       is made by the Trust, through its Claims Integrity Program or other
  means, in reducing the number of illegitimate matrix claims, a
    significant number of the claims which proceed to audit might be
interpreted as satisfying the matrix eligibility criteria,  
      notwithstanding the possibility that the claimants may not in fact
          have serious heart valve disease. If so, notwithstanding any agreement
     to, or approval of, the Seventh Amendment described above, matrix
          claims found eligible for payment after audit may cause total payments
to exceed the $3,750.0 million cap of the settlement fund.  

         Should the settlement fund be exhausted, most of the matrix claimants
       who filed their matrix claims on or before May 3, 2003 and who pass
        the audit process at a time when there are insufficient funds to pay
      their claims may pursue an additional opt out right created by the
         Sixth Amendment to the settlement agreement, unless the Company first
          elects, in its sole discretion, to pay the matrix benefit after audit.
          Sixth Amendment opt out claimants may then sue the Company in the tort
      system, subject to the settlement's limitations on such claims. In
         addition to the limitations on all Intermediate and Back-End opt outs
(such as the prohibition on seeking punitive damages and the
      requirement that the claimant sue only on the valve condition that
      gave rise to the claim), a Sixth Amendment opt out may not sue any
      defendant other than the Company and may not join his or her claim
       with the claim of any other opt out. The Company cannot predict the
        ultimate number of individuals who might be in a position to elect a
       Sixth Amendment opt out or who may in fact elect to do so, but that
      number could be substantial. Several class members affected by the
         terms of the Sixth Amendment opposed the approval of the amendment on
         the ground that, should the settlement fund be exhausted, they should
     be entitled to pursue tort claims, including a claim for punitive
          damages, without the limitations imposed by the Sixth Amendment. While
  the District Court overruled those objections and approved the
         amendment, the class members have appealed to the United States Court
        of Appeals for the Third Circuit. That appeal has been fully briefed
       and argued and is awaiting decision. The Company cannot predict the
outcome of this appeal.                                     

       Some individuals who registered to participate in the settlement by
        May 3, 2003, who had demonstrated either FDA+ level regurgitation or
mild mitral regurgitation on an                             

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

     echocardiogram completed after diet drug use and conducted either
    outside of the settlement prior to January 3, 2003 or within the
        settlement's screening program, and who subsequently develop (at any
        time before the end of 2015) a valvular condition that would qualify
     for a matrix payment may elect to pursue a Back-End opt out. Such
         individuals may pursue a Back-End opt out within 120 days of the date
       on which they first discover or should have discovered their matrix
condition. The Company cannot predict the ultimate number of
       individuals who may be in a position to elect a Back-End opt out or
 who may in fact elect to do so, but that number could also be
substantial.                                                

    The Company's current understanding is that approximately 76,000
 Intermediate opt out forms were submitted by May 3, 2003, the
          applicable deadline for most class members (other than qualified class
        members receiving echocardiograms through the Trust after January 3,
      2003, who may exercise Intermediate opt out rights within 120 days
       after the date of their echocardiogram). The number of Back-End opt
out forms received as of July 14, 2004 is estimated to be   
       approximately 20,000, although certain additional class members may
      elect to exercise Back-End opt out rights in the future (under the
         same procedure as described above) even if the settlement fund is not
    exhausted. After eliminating forms that are duplicative of other
   filings, forms that are filed on behalf of individuals who have
       already either received payments from the Trust or settlements from
       the Company, and forms that are otherwise invalid on their face, it
        appears that approximately 77,000 individuals had filed Intermediate
or Back-End opt out forms as of July 14, 2004.              

 Purported Intermediate or Back-End opt outs (as well as Sixth
     Amendment opt outs) who meet the settlement's medical eligibility
        requirements may pursue lawsuits against the Company, but must prove
     all elements of their claims - including liability, causation and
        damages - without relying on verdicts, judgments or factual findings
       made in other lawsuits. They also may not seek or recover punitive,
   exemplary or multiple damages and may sue only for the valvular
     condition giving rise to their opt out right. To effectuate these
  provisions of the settlement, the federal court overseeing the
         settlement had issued orders limiting the evidence that could be used
          by plaintiffs in such cases. Those orders, however, were challenged on
        appeal and were reversed by a panel of the U.S. Court of Appeals for
      the Third Circuit in May 2004. The Company's petition to the Third
         Circuit for a rehearing or rehearing en banc was subsequently denied.
      The Company is considering a petition to the United States Supreme
Court for a writ of certiorari.                             

     In addition to the specific matters discussed herein, the federal
   court overseeing the national settlement has issued a number of
         rulings concerning the processing of matrix claims and the rights of,
and limitations placed on, class members by the terms of the
        settlement. Several of those rulings are being challenged on appeal.
          Certain class members have also filed a number of motions and lawsuits
attacking both the binding effect of the settlement and the 
        administration of the Trust, some of which have been decided against
         class members and are currently on appeal. The Company cannot predict
the outcome of any of these motions or lawsuits.            

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

       As of July 19, 2004, approximately 53,000 individuals who had filed
     Intermediate or Back-End opt out forms had served lawsuits on the
     Company. The claims of approximately 42% of the plaintiffs in the
     Intermediate and Back-End opt out cases served on the Company are
     pending in federal court, with approximately 36% pending in state
   courts. The claims of approximately 22% of the Intermediate and
      Back-End opt out plaintiffs have been removed from state courts to
      federal court, but are still subject to a possible remand to state
       court. The Company expects to challenge vigorously all Intermediate
   and Back-End opt out claims of questionable validity or medical
    eligibility and a number of cases have already been dismissed on
         eligibility grounds. However, the total number of filed lawsuits that
     meet the settlement's opt out criteria will not be known for some
        time. As a result, the Company cannot predict the ultimate number of
     purported Intermediate or Back-End opt outs that will satisfy the
settlement's opt out requirements, but that number could be 
        substantial. As to those opt outs who are found eligible to pursue a
       lawsuit, the Company also intends to vigorously defend these cases.

        The Company has resolved the claims of all but a small percentage of
       the "initial" opt outs (i.e., those individuals who exercised their
          right to opt out of the settlement class) and continues to work toward
      resolving the rest. The Company intends vigorously to defend those
 initial opt out cases that cannot be resolved prior to trial.

      On July 27, 2004, a Philadelphia jury in the Pennsylvania Court of
       Common Pleas, First Judicial District, hearing the Intermediate opt
        out cases of Istnick v. Wyeth, et al., No. 021200268, and Clepper v.
 Wyeth, et al., No. 021202456, returned a verdict finding that
          plaintiff Istnick had not been damaged by her use of PONDIMIN and that
          plaintiff Clepper had been damaged in the amount of $48,000 by the use
         of PONDIMIN. The Istnick case was thereupon dismissed and the parties
        resolved the Clepper case. On July, 30, 2004, a Philadelphia jury in
    the Pennsylvania Court of Common Pleas, First Judicial District,
         hearing the Intermediate opt out case of Cannon v. Wyeth, et al., No.
       021201534, returned a defense verdict finding that plaintiff Cannon
had not proven that she had valvular heart disease. The     
   Istnick/Clepper and the Cannon cases were tried under a reverse
          bifurcation procedure, in which the parties first try the issue of the
          plaintiff's alleged injury and damages, and only proceed to a trial of
          the Company's liability for the jury's award if any damages are found.
     Because the Istnick/Clepper and Cannon cases were resolved by the
      damage phase, the cases did not proceed to the liability phase. On
    August 6, 2004, a Philadelphia jury in the Pennsylvania Court of
        Common Pleas, First Judicial District, hearing the combined Back-End
      opt out cases of Davis v. Wyeth, et al., No. 021101477, Sidwell v.
         Wyeth, et al., No 021101431, Roberts v. Wyeth, et al., No. 021102564,
       May v. Wyeth, et al., No. 021103564, and Rogowski v. Wyeth, et al.,
         No. 021201594 returned a verdict in favor of the plaintiffs, awarding
       plaintiff Davis $1,000 in damages and the remaining plaintiffs $750
each in damages.                                            

    On April 27, 2004, a jury in Beaumont, Texas hearing the case of
  Coffey, et al. v. Wyeth, et al., No. E-167,334, 172nd Judicial
          District Court, Jefferson Cty., TX, returned a verdict in favor of the
plaintiffs for $113.353 million in compensatory damages and 

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

    $900.0 million in punitive damages for the wrongful death of the
        plaintiffs' decedent, allegedly as a result of PPH caused by her use
     of PONDIMIN. On May 17, 2004, the trial court entered judgment on
          behalf of the plaintiffs for the full amount of the jury's verdict, as
          well as $4.2 million in pre-judgment interest and $188,737 in guardian
    ad litem fees. On July 26, 2004, the trial court denied in their
  entirety the Company's motions for a new trial or for judgment
    notwithstanding the verdict, including the Company's request for
       application of Texas's statutory cap on punitive damage awards. The
      Company intends to file an appeal from the judgment entered by the
         trial court and believes that it has strong arguments for reversal or
      reduction of the awards on appeal due to the significant number of
        legal errors made during trial and in the charge to the jury and due
          to a lack of evidence to support aspects of the verdict. In connection
        with its appeal, the Company will be required to post a bond, which,
        under Texas law, may not exceed $25.0 million. The appeal process is
expected to take one to two years at a minimum.             

         As of July 16, 2004, the Company was a defendant in approximately 350
         lawsuits in which the plaintiff alleges a claim of PPH, alone or with
       other alleged injuries. Almost all of these claimants must meet the
       definition of PPH set forth in the national settlement agreement in
   order to pursue their claims outside of the national settlement
        (payment of such claims, by settlement or judgment, would be made by
          the Company and not the Trust). Approximately 75 of these cases appear
          to be eligible to pursue a PPH lawsuit under the terms of the national
          settlement. In approximately 50 of these cases the Company expects the
          PPH claims to be voluntarily dismissed by the claimants (although they
      may continue to pursue other claims). In approximately 45 of these
          cases the Company has filed or expects to file motions under the terms
          of the national settlement to preclude plaintiffs from proceeding with
 their PPH claims. For the balance of these cases, the Company
       currently has insufficient medical information to assess whether or
   not the claimants meet the definition of PPH under the national
         settlement. The Company continues to work toward resolving the claims
         of individuals who allege that they have developed PPH as a result of
          their use of the diet drugs and intends vigorously to defend those PPH
cases that cannot be resolved prior to trial.               

      In 2003, the Company increased its reserves in connection with the
          REDUX and PONDIMIN diet drug matters by $2,000.0 million, bringing the
         total of the charges taken to date to $16,600.0 million. The $3,261.3
         million reserve balance at June 30, 2004 represents management's best
          estimate of the minimum aggregate amount anticipated to cover payments
      in connection with the Trust, up to its cap, initial opt outs, PPH
claims, Intermediate, Back-End or Sixth Amendment opt outs  
      (collectively, the "downstream" opt outs), and the Company's legal
     fees related to the diet drug litigation. Due to its inability to
      estimate the ultimate number of valid downstream opt outs, and the
         merits and value of their claims, as well as the inherent uncertainty
     surrounding any litigation, the Company is unable to estimate the
  amount of any additional financial exposure represented by the
   downstream opt out litigation. However, the amount of financial
         exposure beyond that which has been recorded could be significant. In
      analyzing its reserve requirements, the Company has not considered
final implementation of the                                 

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

       proposed Seventh Amendment to be more likely than not because there
         can be no assurance that the Company will ultimately proceed with the
        amendment (based upon the level of participation in the amendment or
     for other reasons), or that the amendment will be approved by the
          court and upheld on appeal. However, if the proposed Seventh Amendment
 is implemented, it is likely that additional reserves will be
      required. Any such additional reserves cannot be estimated at this
          time, but the amount of such additional reserves could be significant.

    The Company intends to vigorously defend itself in the diet drug
          litigation and believes it can marshal significant resources and legal
      defenses to limit its ultimate liability. However, in light of the
        circumstances discussed above, including the unknown number of valid
       matrix claims and the unknown number and merits of valid downstream
       opt outs, and the effect, if any, of the proposed Seventh Amendment
 referred to above, it is not possible to predict the ultimate
   liability of the Company in connection with its diet drug legal
        proceedings. It is therefore not possible to predict whether, and if
        so when, such proceedings will have a material adverse effect on the
          Company's financial condition, results of operations and/or cash flows
     and whether cash flows from operating activities and existing and
          prospective financing resources will be adequate to fund the Company's
        operations, pay all liabilities related to the diet drug litigation,
         pay dividends, maintain the ongoing programs of capital expenditures,
and repay both the principal and interest on its outstanding
     obligations without the disposition of significant strategic core
assets and/or reductions in certain cash outflows.          

Note 8.   Company Data by Segment                                               
-----------------------                                     

   The Company has four reportable segments: Wyeth Pharmaceuticals
       (Pharmaceuticals), Wyeth Consumer Healthcare (Consumer Healthcare),
         Fort Dodge Animal Health (Animal Health) and Corporate. The Company's
     Pharmaceuticals, Consumer Healthcare and Animal Health reportable
       segments are strategic business units that offer different products
   and services. Beginning in the 2003 fourth quarter, the Company
         changed its reporting structure to include the Animal Health business
   as a separate reporting segment. The Animal Health business was
        previously reported within the Pharmaceuticals segment. Prior period
        information presented herein has been restated to be on a comparable
      basis. The reportable segments are managed separately because they
  manufacture, distribute and sell distinct products and provide
        services that require various technologies and marketing strategies.
        The Company's Corporate segment is responsible for the treasury, tax
         and legal operations of the Company's businesses and maintains and/or
         incurs certain assets, liabilities, income, expense, gains and losses
  related to the overall management of the Company which are not
allocated to the other reportable segments.                 

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 WYETH
            NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
 (Unaudited)

                                                                · Download Table
                                                                                            
                                                                                  
                                                Net Revenue                       
                          --------------------------------------------------------
                                Three Months                    Six Months        
                               Ended June 30,                 Ended June 30,      
(In thousands)            -------------------------      -------------------------
Segment                      2004           2003            2004           2003   
------------------------  ----------     ----------      ----------     ----------
                                                                                  
Pharmaceuticals           $3,392,977     $2,979,528      $6,600,563     $5,954,586
Consumer Healthcare          591,402        553,085       1,179,753      1,085,089
Animal Health                238,826        213,943         457,678        395,938
                          ----------     ----------      ----------     ----------

Total                     $4,223,205     $3,746,556      $8,237,994     $7,435,613
                          ==========     ==========      ==========     ==========
                                                                      
                                                                · Download Table
                                                                                            
                                                                                  
                                            Income Before Taxes                   
                          --------------------------------------------------------
                                Three Months                    Six Months        
                               Ended June 30,                 Ended June 30,      
(In thousands)            -------------------------      -------------------------
Segment                      2004           2003            2004           2003   
------------------------  ----------     ----------      ----------     ----------
                                                                                  
Pharmaceuticals(1)          $965,840     $1,045,233      $1,837,953     $1,962,887
Consumer Healthcare          104,635        149,000         214,093        229,204
Animal Health                 50,341         38,133          88,035         64,361
Corporate(2)                 (57,738)      (124,154)       (133,112)       634,348
                          ----------     ----------      ----------     ----------

Total(3)                  $1,063,078     $1,108,212      $2,006,969     $2,890,800
                          ==========     ==========      ==========     ==========
                                                                      
         (1)  Pharmaceuticals for the 2004 first half included a first quarter
         charge of $145,500 within Research and development expenses
             related to the upfront payment to Solvay in connection with the
          co-development and co-commercialization of four neuroscience
           compounds, most notably, bifeprunox, a late stage compound in
            Phase 3 development for schizophrenia and other possible uses.

        (2)  Corporate for the 2003 first half included a first quarter gain
of $860,554 related to the sale of Amgen shares.  

       (3)  Income before taxes included $12,900 and $153,600 for the 2004
           second quarter and first half, respectively, and $287,500 and
  $290,200 for the 2003 second quarter and first half,
            respectively, related to gains from the divestiture of certain
        Pharmaceuticals and Consumer Healthcare products. The 2004
          divestitures included product rights to indiplon, DIAMOX (in
            Japan), and the Company's nutritionals products in France. The
              2003 divestitures included product rights in various territories
         to ATIVAN, ISORDIL, DIAMOX (excluding Japan), ZIAC, ZEBETA,
AYGESTIN, ANACIN and SONATA.                      

Note 9.   Immunex/Amgen Transactions                                            
--------------------------                                  

       During the first quarter of 2003, the Company completed the sale of
  31,235,958 shares of Amgen common stock held by the Company at
       December 31, 2002. These shares netted proceeds of $1,579.9 million
         and resulted in a gain of $860.6 million ($558.7 million after-tax or
$0.42 per share-diluted).                                   

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

Item 2.   Results of Operations                                                 
---------------------                                       

Overview                                                    
--------                                                    

         Wyeth is one of the world's largest research-based pharmaceutical and
    health care products companies and is a leader in the discovery,
          development, manufacturing and marketing of pharmaceuticals, vaccines,
          biopharmaceuticals, non-prescription medicines and animal health care.
   The Company has four reportable segments: Wyeth Pharmaceuticals
       (Pharmaceuticals), Wyeth Consumer Healthcare (Consumer Healthcare),
     Fort Dodge Animal Health (Animal Health) and Corporate, which are
    managed separately because they manufacture, distribute and sell
distinct products and provide services which require various
     technologies and marketing strategies. These segments reflect how
        senior management reviews the business, makes investing and resource
allocation decisions, and assesses operating performance.   

       Our Pharmaceuticals segment, which provided 80% of our consolidated
       net revenue for the first half of both 2004 and 2003, manufactures,
distributes and sells branded human ethical pharmaceuticals,
         biologicals and nutritionals. Principal products include neuroscience
      therapies, cardiovascular products, nutritionals, gastroenterology
         drugs, anti-infectives, vaccines, oncology therapies, musculoskeletal
        therapies, hemophilia treatments, immunological products and women's
        health care products. These products are promoted and sold worldwide
          primarily to wholesalers, pharmacies, hospitals, physicians, retailers
and other human health care institutions.                   

The Consumer Healthcare segment, which provided 14% of our  
       consolidated net revenue for the first half of 2004 and 15% for the
first half of 2003, manufactures, distributes and sells     
    over-the-counter health care products, which include analgesics,
cough/cold/allergy remedies, nutritional supplements, and   
         hemorrhoidal, asthma and other relief items. These products generally
       are sold to wholesalers and retailers and are promoted primarily to
consumers worldwide through advertising.                    

        Our Animal Health segment, which provided 6% of our consolidated net
         revenue for the first half of 2004 and 5% for the first half of 2003,
manufactures, distributes, and sells animal biological and  
          pharmaceutical products, including vaccines, pharmaceuticals, parasite
        control and growth implants. These products are sold to wholesalers,
       retailers, veterinarians and other animal health care institutions.

        The Corporate segment is responsible for the treasury, tax and legal
      operations of the Company's businesses. It maintains and/or incurs
   certain assets, liabilities, income, expenses, gains and losses
 related to the overall management of the Company that are not
allocated to the other reportable segments.                 

         All of Wyeth's business units exhibited strong revenue growth for the
         2004 first half compared with the first half of 2003. Pharmaceuticals
had net revenue growth of 11% to                            

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

    $6,600.6 million, which was spurred by the strong performance of
several key products in the 2004 first half:                

      o    EFFEXOR (a neuroscience therapy) - up 31% to $1,607.5 million
      o    PROTONIX (a gastroenterology drug) - up 19% to $799.7 million
      o    ZOSYN/TAZOCIN (an infectious disease drug) - up 28% to $363.7
million                                           
          o    ENBREL (a musculoskeletal therapy) - up 171% (internationally) to
$291.0 million                                    
    o    RAPAMUNE (an immunology product) - up 34% to $114.4 million

          Collectively, sales of these products increased 34% for the first half
of 2004 compared with the first half of 2003.               

         Other areas of revenue growth for the Pharmaceuticals segment for the
    2004 first half included ZOTON, BENEFIX and rhBMP-2 and alliance
revenue from sales of ENBREL and the CYPHER* stent.         

         The combined revenue increase from the Company's growth products more
        than offset the loss of revenue from the decline in sales of PREVNAR
and the PREMARIN family of products in the 2004 first half. 

       Both Consumer Healthcare and Animal Health posted strong results in
   the 2004 first half. Consumer Healthcare net revenue rose 9% to
       $1,179.7 million and Animal Health had net revenue growth of 16% to
      $457.7 million. The increase in Consumer Healthcare sales resulted
   primarily from global growth in the core brands ADVIL, CENTRUM,
      CALTRATE and ROBITUSSIN. The moxidectin family of products, led by
     strong sales of PROHEART 6 vaccine, were the principal drivers of
Animal Health's growth.                                     

         On a combined basis, Pharmaceuticals and Consumer Healthcare realized
  aggregate pre-tax gains from product divestitures amounting to
   approximately $153.6 million for the first half of 2004, $136.6
        million less than gains from product divestitures for the first half
of 2003.                                                    

   In order to continue to succeed, the Company must overcome some
      significant challenges over the next few years. One of the biggest
challenges is to defend the Company in the ongoing diet drug
  litigation (see Note 7 to the consolidated condensed financial
       statements). In this regard, we continue to support the appropriate
        handling of valid claims under the national class action settlement,
          which would be impacted by the implementation of the Seventh Amendment
       (see Note 7 to the consolidated condensed financial statements). At
       the same time, we are committed to vigorously defending the Company
   and aggressively eliminating fraud and abuse in the settlement.

       *    The active ingredient in RAPAMUNE, sirolimus, coats the CYPHER
coronary stent marketed by Johnson & Johnson.     

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

        In order for us to sustain the growth of our core group of products,
       we must continue to meet the global demand of our customers. Two of
our important core products are PREVNAR and ENBREL, both    
 biopharmaceutical products that are extremely complicated and
          difficult to manufacture. We continue to seek to improve manufacturing
    processes and overcome production issues. Necessary upgrades and
          improvements to the Company's PREVNAR filling line, which extended the
 planned plant shutdown in late 2003 and early 2004, have been
      completed and that line is now operational. During the 2004 second
        quarter, additional vial filling capacity became available through a
        third party filler and a second Wyeth bulk vaccine formulation suite
         became operational. Overall, supply in 2004 is expected to exceed the
2003 level of 20 million doses.                             

        The construction of the Company's Grange Castle facility in Ireland,
         which remains on schedule to begin production in 2005, is critical to
     further expand the production of ENBREL and enable this important
product to reach even more patients throughout the world.   

        In July 2002, the National Institutes of Health (NIH) announced that
         it was discontinuing a portion of its Women's Health Initiative (WHI)
    study assessing the value of combination estrogen plus progestin
         therapy, and in early March 2004, the portion of the study addressing
    estrogen-only therapy also was discontinued. The Company remains
          committed to women's health care and stands behind the PREMARIN family
        of products as the standard of therapy to help women address serious
menopausal symptoms. We have continued our efforts to inform
      physicians and patients of the appropriate role of hormone therapy
(HT) for the short-term treatment of menopausal symptoms and
         introduced low-dose versions of PREMARIN and PREMPRO in 2003. Despite
         these efforts, sales of the PREMARIN family of products declined from
     approximately $679.3 million for the first half of 2003 to $488.6
       million for the first half of 2004. The launch of low-dose PREMARIN
and PREMPRO has helped to moderate the decrease in sales.   

In April 2004, the Company announced the dissolution of our 
    collaboration with MedImmune, Inc. (MedImmune) for the nasal flu
     vaccine FLUMIST (Influenza Virus Vaccine Live, Intranasal) and an
      investigational second-generation liquid formulation, Cold Adapted
         Influenza Vaccine-Trivalent (CAIV-T). As a result of the dissolution,
         MedImmune has worldwide rights to these products and will assume full
   responsibility for the manufacturing, marketing, and selling of
       FLUMIST. As part of the dissolution process, MedImmune will acquire
         Wyeth's distribution facility in Louisville, Kentucky. The Company is
     providing bulk manufacturing materials and will transfer clinical
   trial data, as well as provide manufacturing services, during a
     transition that the companies expect to complete in large part by
fourth quarter 2004.                                        

     The Company entered into inventory management agreements with the
       majority of full-line wholesalers in the 2004 second quarter. While
         the specific terms are confidential, essentially the wholesalers have
       agreed to maintain inventory at certain targeted levels. In return,
the Company has agreed that the wholesalers will receive the
opportunity to                                              

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

         buy specific amounts of product at pre-price increase prices whenever
       Wyeth implements a price increase. As a result, we expect that both
         Wyeth and our wholesaler partners will be able to manage product flow
     and inventory levels in a way that more closely follows trends in
prescriptions.                                              

          Wyeth's focus is on maximizing the strong growth potential of our core
         group of patent protected innovative products that we have introduced
in recent years as well as actively pursuing in-licensing   
         opportunities. In March 2004, we announced an important alliance with
      Solvay Pharmaceuticals (Solvay) to co-develop and co-commercialize
        four neuroscience compounds, most notably, bifeprunox. This alliance
         is intended to supplement new product introductions expected to begin
primarily in the 2006-2007 time period.                     

The Company's principal strategy for success is based on R&D
         innovations. The Company intends to leverage its breadth of knowledge
 and resources across three development platforms (traditional
pharmaceuticals, biopharmaceuticals and vaccines) to produce
    first-in-class and best-in-class therapies for significant unmet
medical needs around the world.                             

       Generally, the Company faces the same difficult challenges that all
      research-based pharmaceutical companies are confronting, including
political pressures in countries around the world to reduce 
prescription drug prices; increasingly stringent regulatory 
  requirements that are raising the cost of drug development and
       manufacturing; and uncertainties about the outcome of key political
issues in the United States regarding drug importation.     

Net Revenue                                                 
-----------                                                 

    Worldwide net revenue for the 2004 second quarter and first half
        increased 13% and 11%, respectively, compared with prior year levels
        and was due to increases in the Pharmaceuticals, Consumer Healthcare
         and Animal Health segments. Excluding the impact of foreign exchange,
          worldwide net revenue increased 11% for the 2004 second quarter and 8%
for the 2004 first half.                                    

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

   The following table sets forth worldwide net revenue results by
    reportable segment together with the percentage changes from the
comparable period in the prior year:                        

                   Net Revenue
                    ----------------------
                    Three Months
                    Ended June 30,
(Dollars in millions)        ----------------------         
        Segment                        2004          2003         % Increase
        ------------------------     --------      --------       ----------
      Pharmaceuticals              $3,393.0      $2,979.5            14%
      Consumer Healthcare             591.4         553.1             7%
      Animal Health                   238.8         214.0            12%
                                     --------      --------       ----------
      Total                        $4,223.2      $3,746.6            13%
                                     ========      ========       ==========

                   Net Revenue
                    ----------------------
                    Six Months
                    Ended June 30,
(Dollars in millions)        ----------------------         
        Segment                        2004          2003         % Increase
        ------------------------     --------      --------       ----------
      Pharmaceuticals              $6,600.6      $5,954.6            11%
      Consumer Healthcare           1,179.7       1,085.1             9%
      Animal Health                   457.7         395.9            16%
                                     --------      --------       ----------
      Total                        $8,238.0      $7,435.6            11%
                                     ========      ========       ==========

Pharmaceuticals                                             
---------------                                             

    Worldwide Pharmaceuticals net revenue increased 14% for the 2004
        second quarter and 11% for the 2004 first half. The increases in net
    revenue were due primarily to higher sales of EFFEXOR XR (global
    growth resulting primarily from higher volume), PROTONIX (strong
        prescription volume growth), ENBREL (internationally), ZOSYN/TAZOCIN
          and RAPAMUNE (each reflecting growth in the U.S. and internationally),
      ZOTON, BENEFIX and rhBMP-2, offset, in part, by lower sales of the
          PREMARIN family of products and PREVNAR (supply constraints). Alliance
   revenue also contributed to the 2004 first half increase in net
         revenue, but declined in the 2004 second quarter due to ALTACE (lower
  volume caused by higher trade inventory levels). Excluding the
       favorable impact of foreign exchange, worldwide Pharmaceuticals net
      revenue increased 12% and 8% for the 2004 second quarter and first
half, respectively.                                         

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

The following table sets forth the significant worldwide    
       Pharmaceuticals net revenue by product for the three and six months
         ended June 30, 2004 compared with the same periods in the prior year:

                                                                · Download Table
                                                                                       
                                                                             
                                 Three Months                Six Months      
                                Ended June 30,             Ended June 30,    
                             ---------------------      ---------------------
(In millions)                  2004         2003          2004         2003  
---------------------        --------     --------      --------     --------
                                                                             
EFFEXOR                        $831.8       $636.4      $1,607.5     $1,229.9
PROTONIX                        389.2        310.4         799.7        670.4
PREMARIN family                 222.7        276.6         488.6        679.3
Nutritionals                    228.3        215.3         444.1        418.1
PREVNAR                         219.1        264.9         392.5        493.7
ZOSYN / TAZOCIN                 182.3        145.0         363.7        285.1
ENBREL                          156.0         64.6         291.0        107.4
Oral Contraceptives             141.0        134.6         283.8        288.9
ZOTON                           114.7         86.6         226.7        159.1
BENEFIX                          76.5         62.5         151.0        121.1
REFACTO                          64.0         56.4         124.3        108.8
RAPAMUNE                         56.1         40.8         114.4         85.5
SYNVISC                          53.4         61.0         101.6        110.1
ATIVAN                           47.7         55.0          99.3        110.0
rhBMP-2                          53.5         15.8          76.6         22.4
Alliance revenue                152.0        156.5         301.4        251.2
Other                           404.7        397.1         734.4        813.6
                             --------     --------      --------     --------
Total Pharmaceuticals        $3,393.0     $2,979.5      $6,600.6     $5,954.6
                             ========     ========      ========     ========
                                                                      
Consumer Healthcare                                         
-------------------                                         

       Worldwide Consumer Healthcare net revenue increased 7% for the 2004
       second quarter and 9% for the 2004 first half, exhibiting continued
       solid performance in the U.S. and internationally. The results were
       attributable to a number of factors, including global growth in the
         core brands CENTRUM, ADVIL and CALTRATE. The 2004 first half increase
       was also due to higher sales of ROBITUSSIN. Excluding the impact of
         foreign exchange, worldwide Consumer Healthcare net revenue increased
6% for both the 2004 second quarter and first half.         

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

 The following table sets forth significant worldwide Consumer
        Healthcare net revenue by product for the three and six months ended
   June 30, 2004 compared with the same periods in the prior year:

                                                                · Download Table
                                                                                     
                                                                           
                                 Three Months               Six Months     
                                Ended June 30,            Ended June 30,   
                               ----------------        --------------------
(In millions)                   2004      2003           2004        2003  
-------------------------      ------    ------        --------    --------
                                                                           
CENTRUM                        $155.4    $134.4          $294.5      $254.0
ADVIL                           123.0      99.6           237.4       208.4
CALTRATE                         45.0      38.7            85.0        68.9
ROBITUSSIN                       28.9      30.4            77.3        67.0
SOLGAR                           25.5      26.7            55.2        55.2
ADVIL COLD & SINUS               21.4      27.9            51.6        52.5
CHAPSTICK                        17.2      16.0            43.5        39.4
DIMETAPP                         14.7      12.5            34.8        30.0
ALAVERT                          15.9      30.7            33.5        51.7
Other                           144.4     136.2           266.9       258.0
                               ------    ------        --------    --------

Total Consumer Healthcare      $591.4    $553.1        $1,179.7    $1,085.1
                               ======    ======        ========    ========
                                                                      
Animal Health                                               
-------------                                               

         Worldwide Animal Health net revenue increased 12% for the 2004 second
          quarter and 16% for the 2004 first half, due primarily to higher sales
        of companion animal and livestock products offset, in part, by lower
      sales of equine products as a result of decreases in sales of WEST
NILE-INNOVATOR (dosing transition and product competition). 
      PROHEART products, the largest contributor to the companion animal
       products sales growth, had sales of $21.3 million and $35.6 million
        for the three and six months ended June 30, 2004 compared with $14.3
        million and $21.2 million for the similar periods in the prior year.
        Excluding the favorable impact of foreign exchange, worldwide Animal
        Health net revenue increased 10% for the 2004 second quarter and 11%
for 2004 first half.                                        

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

         The following table sets forth worldwide Animal Health net revenue by
     product category for the three and six months ended June 30, 2004
compared with the same periods in the prior year:           

                                      Three Months            Six Months
                                       Ended June 30,         Ended June 30,
                                        -----------------      -----------------
         (In millions)                  2004       2003        2004       2003
          -------------------------     ------     ------      ------     ------
          Livestock products             $92.5      $78.6      $176.2     $151.3
          Companion animal products       78.2       66.5       141.6      107.3
          Equine products                 43.9       48.0        91.8       94.8
          Poultry products                24.2       20.9        48.1       42.5
                                        ------     ------      ------     ------

          Total Animal Health           $238.8     $214.0      $457.7     $395.9
                                        ======     ======      ======     ======

          The following table sets forth the percentage changes in worldwide net
       revenue by reportable segment and geographic area compared with the
       prior year, including the effect volume, price and foreign exchange
had on these percentage changes:                            

                                                        · Enlarge/Download Table
                                                                                                                     
                                                                                                           
                               % Increase (Decrease)                       % Increase (Decrease)           
                          Three Months Ended June 30, 2004             Six Months Ended June 30, 2004      
                     ------------------------------------------  ------------------------------------------
                                        Foreign        Total                        Foreign        Total   
                     Volume    Price    Exchange    Net Revenue  Volume    Price    Exchange    Net Revenue
                     ------    -----    --------    -----------  ------    -----    --------    -----------
                                                                                                           
Pharmaceuticals                                                                                            
-------------------                                                                                        
United States            8%       3%          -             11%     (2%)      5%          -              3%
International           13%       1%          4%            18%     15%       1%          8%            24%
                        ---      ---          --            ---     ---      ---          --            ---
Total                   10%       2%          2%            14%      5%       3%          3%            11%
                        ===      ===          ==            ===     ===      ===          ==            ===

Consumer Healthcare                                                                                        
-------------------                                                                                        
United States            8%      (3%)         -              5%      5%      (1%)         -              4%
International            3%       3%          3%             9%      7%       2%          8%            17%
                        ---      ---          --            ---     ---      ---          --            ---
Total                    6%       -           1%             7%      6%       -           3%             9%
                        ===      ===          ==            ===     ===      ===          ==            ===

Animal Health                                                                                              
-------------------                                                                                        
United States            4%       7%          -             11%      7%       9%          -             16%
International            6%       2%          4%            12%      5%       1%          9%            15%
                        ---      ---          --            ---     ---      ---          --            ---
Total                    5%       5%          2%            12%      6%       5%          5%            16%
                        ===      ===          ==            ===     ===      ===          ==            ===

Total                                                                                                      
-------------------                                                                                        
United States            8%       2%          -             10%     (1%)      4%          -              3%
International           11%       1%          4%            16%     13%       1%          8%            22%
                        ---      ---          --            ---     ---      ---          --            ---
Total                    9%       2%          2%            13%      5%       3%          3%            11%
                        ===      ===          ==            ===     ===      ===          ==            ===
                                                                      
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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

Operating Expenses                                          
------------------                                          

          Cost of goods sold, as a percentage of Net revenue, decreased to 26.8%
       for the 2004 second quarter compared with 27.2% for the 2003 second
         quarter due primarily to lower inventory and manufacturing losses and
       the partial reversal of the reserve provided for PREMPRO returns in
          the 2003 second quarter (as described in the "Certain Factors That May
  Affect Future Results" section, herein) in the Pharmaceuticals
   segment. The increase in gross margin was offset, in part, by a
        decrease in alliance revenue (lower sales of ALTACE) and an increase
in royalty costs (higher sales of ENBREL in Europe) in the  
       Pharmaceuticals segment. Cost of goods sold, as a percentage of Net
     revenue, increased to 27.0% for the 2004 first half compared with
       26.2% for the 2003 first half due primarily to higher manufacturing
    costs and a less profitable product mix caused by lower sales of
         higher margin products, including the PREMARIN family of products and
        PREVNAR, and higher sales of lower margin products such as PROTONIX,
         ZOSYN/TAZOCIN and ENBREL (internationally) offset, in part, by higher
     sales of higher margin EFFEXOR XR, increased alliance revenue and
lower inventory adjustments in the Pharmaceuticals segment. 

        Selling, general and administrative expenses, as a percentage of Net
          revenue, decreased to 33.8% for both the 2004 second quarter and first
          half compared with 36.4% for the 2003 second quarter and 35.7% for the
    2003 first half due primarily to lower marketing expenses in the
        Pharmaceuticals segment. These decreases resulted primarily from net
         revenue increasing at a higher rate than expenses (13% vs. 5% for the
2004 second quarter and 11% vs. 5% for the 2004 first half).

       Research and development expenses increased 17% for the 2004 second
   quarter and 27% for the 2004 first half primarily due to higher
         clinical grant spending in the Pharmaceuticals segment as a result of
        the initiation of several Phase 3 programs offset, in part, by lower
other research operating expenses (including lower licensing
        expenses). The increase in research and development expenses for the
       2004 first half also reflects the impact of the upfront payment and
         charge in the 2004 first quarter of $145.5 million made in connection
     with the agreement entered into between the Company and Solvay to
     co-develop and co-commercialize four neuroscience compounds, most
notably, bifeprunox.                                        

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

Interest Expense and Other Income                           
---------------------------------                           

          Interest expense, net for the three and six months ended June 30, 2004
and 2003 consisted of the following:                        

                                      Three Months          Six Months
                                       Ended June 30,       Ended June 30,
                                         ---------------     -----------------
        (In millions)                   2004      2003       2004       2003
         ----------------------------    -----     -----     ------     ------
         Interest expense                $75.4     $72.7     $146.2     $143.8
          Interest income                 (21.4)    (18.9)     (44.8)     (38.4)
Less: amount capitalized for                                
            capital projects              (22.1)    (27.9)     (42.6)     (52.5)
                                         -----     -----     ------     ------

         Total interest expense, net     $31.9     $25.9      $58.8      $52.9
                                         =====     =====     ======     ======

       Interest expense, net increased 23% for the 2004 second quarter and
  11% for the 2004 first half due primarily to lower capitalized
      interest. Weighted average debt outstanding during the 2004 second
     quarter and first half was $8,146.7 million and $8,425.5 million,
         respectively, compared with prior year levels of $6,938.1 million and
         $7,176.1 million, respectively. The impact of higher weighted average
   debt outstanding on interest expense was offset by increases in
       interest income. The lower capitalized interest resulted from lower
       interest rates used for capitalization purposes applied against the
      spending for long-term capital projects in process. These projects
     include the new Grange Castle facility in Ireland, as well as the
expansion of an existing manufacturing facility in Ireland. 

          Other income, net decreased $256.8 million for the 2004 second quarter
       and $136.6 million for the 2004 first half primarily as a result of
          decreases in gains from the divestiture of certain Pharmaceuticals and
        Consumer Healthcare products. The 2004 divestitures included product
         rights to indiplon, DIAMOX (in Japan), and the Company's nutritionals
        products in France. The 2003 divestitures included product rights in
     various territories to ATIVAN, ISORDIL, DIAMOX (excluding Japan),
         ZIAC, ZEBETA, AYGESTIN, ANACIN and SONATA. The sales, profits and net
        assets of these divested products, individually or in the aggregate,
 were not material to either business segment or the Company's
consolidated financial position or results of operations.   

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

Income Before Taxes                                         
-------------------                                         

   The following table sets forth worldwide income before taxes by
    reportable segment together with the percentage changes from the
comparable periods in the prior year:                       

                                                        · Enlarge/Download Table
                                                                                                                   
                                                                                                         
                                                      Income Before Taxes                                
                       --------------------------------------------------------------------------------- 
                                   Three Months                                 Six Months               
                                  Ended June 30,                              Ended June 30,             
                       -------------------------------------       ------------------------------------- 
(Dollars in millions)                            % Increase/                                 % Increase/ 
Segment                  2004         2003        (Decrease)         2004         2003        (Decrease) 
---------------------  --------     --------     -----------       --------     --------     ----------- 
                                                                                                         
Pharmaceuticals(1)       $965.9     $1,045.2             (8%)      $1,838.0     $1,962.9             (6%)
Consumer Healthcare       104.6        149.0            (30%)         214.1        229.2             (7%)
Animal Health              50.3         38.2             32%           88.0         64.4             37% 
Corporate(2)              (57.7)      (124.2)            54%         (133.1)       634.3             -   
                       --------     --------     -----------       --------     --------     ----------- 

Total(3)               $1,063.1     $1,108.2             (4%)      $2,007.0     $2,890.8            (31%)
                       ========     ========     ===========       ========     ========     =========== 
                                                                      
         (1)  Pharmaceuticals for the 2004 first half included a first quarter
               charge of $145.5 within Research and development expenses related
     to the upfront payment to Solvay in connection with the
          co-development and co-commercialization of four neuroscience
               compounds. Excluding the upfront payment from the 2004 first half
              results, but including Pharmaceuticals product divestiture gains
          discussed in footnote 3 below, Pharmaceuticals income before
taxes increased 1%.                               

        (2)  Corporate for the 2003 first half included a first quarter gain
               of $860.6 related to the sale of Amgen shares. Excluding the gain
           on the sale of Amgen shares from the 2003 first half results,
Corporate expenses decreased 41%.                 

          (3)  Income before taxes included $12.9 and $153.6 for the 2004 second
             quarter and first half, respectively, and $287.5 and $290.2 for
              the 2003 second quarter and first half, respectively, related to
       gains from the divestiture of certain Pharmaceuticals and
          Consumer Healthcare products. The 2004 divestitures included
              product rights to indiplon, DIAMOX (in Japan), and the Company's
             nutritionals products in France. The 2003 divestitures included
              product rights in various territories to ATIVAN, ISORDIL, DIAMOX
           (excluding Japan), ZIAC, ZEBETA, AYGESTIN, ANACIN and SONATA.

      Worldwide Pharmaceuticals income before taxes decreased 8% for the
2004 second quarter and 6% for the 2004 first half while    
         Pharmaceuticals net revenue increased 14% for the 2004 second quarter
         and 11% for the 2004 first half. This difference between the decrease
in income before taxes and net revenue growth is primarily  
       attributable to higher research and development expenses related to
     the upfront payment to Solvay, lower other income, net related to
        product divestiture gains and lower gross profit margin rates earned
on Pharmaceuticals net revenue in the 2004 first half.      

       Worldwide Consumer Healthcare income before taxes decreased 30% for
         the 2004 second quarter and 7% for the 2004 first half while Consumer
          Healthcare net revenue increased 7% for the 2004 second quarter and 9%
    for the 2004 first half. This difference between the decrease in
        income before taxes and net revenue growth is primarily attributable
       to lower other income, net related to product divestiture gains and
higher                                                      

35

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

        selling and general expenses offset, in part, by higher gross profit
      margins earned on worldwide sales of Consumer Healthcare products.

   Worldwide Animal Health income before taxes for the 2004 second
   quarter and first half increased 32% and 37%, respectively. The
  increase in the 2004 second quarter and first half results was
          primarily due to higher net revenue and increased gross profit margins
earned on worldwide sales of Animal Health products.        

     Corporate expenses for the 2004 second quarter were $57.7 million
          compared with $124.2 million for the 2003 second quarter. In addition,
  Corporate expenses for the 2004 first half were $133.1 million
          compared with income before taxes of $634.3 million for the 2003 first
          half. Corporate income before taxes for the 2003 first half included a
       gain of $860.6 million from the sale of the Company's Amgen shares.
        Excluding this gain, Corporate expenses would have decreased 41% for
        the 2004 first half. The decrease was due primarily to lower general
         and administrative expenses related to decreased pension and employee
benefit costs.                                              

          Excluding the impact of the certain significant items discussed below,
          the effective tax rate increased slightly to 22.2% for the 2004 second
          quarter and 22.3% for the 2004 first half compared with 22.0% for both
       the 2003 second quarter and first half. The 2004 second quarter and
  first half rate was calculated assuming the benefit of certain
     research and development tax credits. Since the law allowing such
         credits expired in June 2004 and has yet to be renewed, only one-half
    of the annualized benefit was included in the effective tax rate
calculation for the 2004 second quarter and first half.     

  Consolidated Net Income and Diluted Earnings Per Share Results
  --------------------------------------------------------------

As Reported                                                 

         Net income and diluted earnings per share for the 2004 second quarter
         were $827.3 million and $0.62, respectively, compared with net income
     and diluted earnings per share of $864.4 million and $0.65 in the
    prior year, decreases of 4% and 5%, respectively. Net income and
    diluted earnings per share for the 2004 first half were $1,577.0
         million and $1.18, respectively, compared with net income and diluted
       earnings per share of $2,142.3 million and $1.61 in the prior year,
decreases of 26% and 27%, respectively.                     

36

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

Before Certain Significant Items                            

        Net income before certain significant items and diluted earnings per
      share before certain significant items exclude from net income and
diluted earnings per share, respectively, the following:    

o    2004 first quarter upfront payment to Solvay; and      

        o    2003 first quarter gain related to the Company's liquidation of
             Amgen shares received in connection with Amgen's acquisition of
Immunex.                                          

    The Company's management uses both generally accepted accounting
      principles (GAAP) and non-GAAP measures to manage and evaluate the
          Company's performance and believes it is appropriate to disclose these
 non-GAAP measures to assist investors with analyzing business
 performance and trends. However, these measures should not be
 considered in isolation or as a substitute for the results of
         operations and diluted earnings per share prepared in accordance with
        GAAP. The Amgen gain and previous gains related to the Immunex/Amgen
         common stock transactions have been excluded due to the fact that the
        Company had not previously nor does it currently hold a position for
         investment purposes in an entity that, if acquired by another entity,
          would impact the Company's financial position or results of operations
to the significant extent of the Immunex/Amgen common stock 
          transactions. Additionally, the significant upfront payment related to
        the co-development and co-commercialization of the four neuroscience
      compounds being developed with Solvay was immediately expensed and
        included in Research and development expenses. Excluding the payment
       from the Company's results provides a better view of operations for
this accounting period.                                     

        Net income before certain significant items and diluted earnings per
       share before certain significant items for the 2004 first half were
    $1,671.6 million and $1.25, respectively, compared with $1,583.6
     million and $1.19 for the 2003 first half. The increases were due
  primarily to higher net revenue and lower selling, general and
       administrative expenses, as a percentage of net revenue, offset, in
        part, by higher costs of goods sold, as a percentage of net revenue,
        higher research and development spending and lower other income, net
related to product divestiture gains.                       

37

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

    A reconciliation of net income and diluted earnings per share as
    reported under GAAP to net income and diluted earnings per share
         before certain significant items is presented in the following table:

                                                        · Enlarge/Download Table
                                                                                                        
                                                                                              
                                                                 Net Income                   
                                                 -------------------------------------------- 
                                                   Three Months              Six Months       
                                                  Ended June 30,           Ended June 30,     
                                                 -----------------      --------------------- 
(In millions)                                     2004       2003         2004         2003   
-----------------------------------------------  ------     ------      --------     -------- 
                                                                                              
As reported                                      $827.3     $864.4      $1,577.0     $2,142.3 

Gain on sale of Amgen shares(1)                     -          -             -         (558.7)

Co-development / co-commercialization charge(2)     -          -            94.6          -   
                                                 ------     ------      --------     -------- 

As adjusted, before certain significant items    $827.3     $864.4      $1,671.6     $1,583.6 
                                                 ======     ======      ========     ======== 
                                                                      
                                                        · Enlarge/Download Table
                                                                                                        
                                                                                              
                                                          Diluted Earnings per Share          
                                                 -------------------------------------------- 
                                                   Three Months              Six Months       
                                                  Ended June 30,           Ended June 30,     
                                                 -----------------      --------------------- 
                                                  2004       2003         2004         2003   
-----------------------------------------------  ------     ------      --------     -------- 
                                                                                              
As reported                                       $0.62      $0.65         $1.18        $1.61 

Gain on sale of Amgen shares(1)                     -          -             -          (0.42)

Co-development / co-commercialization charge(2)     -          -            0.07          -   
                                                 ------     ------      --------     -------- 

As adjusted, before certain significant items     $0.62      $0.65         $1.25        $1.19 
                                                 ======     ======      ========     ======== 
                                                                      
    (1)  The 2003 first half included a first quarter gain of $860.6
               ($558.7 after-tax or $0.42 per share-diluted) related to the sale
      of 31,235,958 shares of the Company's Amgen common stock
holdings.                                         

      (2)  The 2004 first half included a first quarter charge of $145.5
              ($94.6 after-tax or $0.07 per share-diluted) within Research and
            development expenses related to the upfront payment to Solvay.

Gains from product divestitures are not considered certain  
     significant items because they constitute an integral part of the
   Company's analysis of divisional performance. However, they are
          important to understanding changes in our reported net income. Product
     divestiture gains for the 2004 second quarter and first half were
        $12.9 million and $153.6 million, respectively, compared with $287.5
          million and $290.2 million for the 2003 second quarter and first half.
 Excluding the gains from product divestitures and the certain
          significant items described above, net income and diluted earnings per
          share were $818.3 million and $0.61, respectively, for the 2004 second
     quarter and $1,570.1 million and $1.17 for the 2004 first half as
      compared with $677.4 million and $0.51, respectively, for the 2003
         second quarter and $1,394.9 million and $1.05 in the 2003 first half.

38

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

Liquidity, Financial Condition and Capital Resources        
----------------------------------------------------        

         Cash flows provided by operating activities totaling $1,204.9 million
          during the 2004 first half were generated primarily by net earnings of
        $1,577.0 million, offset, in part, by payments of $588.1 million for
        working capital requirements and payments of $255.2 million relating
         to the diet drug litigation (see Note 7 to the consolidated condensed
financial statements).                                      

       During the 2004 first half, the Company used $589.2 million of cash
          for investments in property, plant and equipment and $959.5 million of
         cash for purchases of marketable securities. In addition, the Company
    received investment proceeds through the sales and maturities of
   marketable securities of $374.6 million and the sales of assets
          totaling $315.9 million. The capital expenditures made during the 2004
      first half were consistent with the Company's commitment to expand
  existing manufacturing and research and development facilities
worldwide, and to build new biotechnology facilities.       

  The Company's financing activities included repayments of debt
      totaling $1,506.7 million and dividend payments of $613.3 million.

     At June 30, 2004, the Company had outstanding $7,926.7 million in
total debt, which consisted of notes payable and other debt.
       Maturities of the Company's obligations as of June 30, 2004 are set
forth below.                                                

                                                                · Download Table
                                                                                       
                                                                             
                              Less than                                  Over
(In millions)        Total       1 year    1-3 years    4-5 years     5 years
-------------     --------    ---------    ---------    ---------    --------

                                                                             
Total debt        $7,926.7       $334.7       $307.1        $18.0    $7,266.9
                                                                      
        The following represents the Company's credit ratings as of June 30,
2004 and as of August 2, 2004:                              

                                                                · Download Table
                                                                                  
                                                                        
                             Moody's               S&P             Fitch
                    ----------------  ----------------  ----------------
                                                                        
Short-term debt                  P-2               A-1               F-2
Long-term debt                  Baa1                 A                A-
Outlook                     Negative          Negative          Negative
Last rating update  December 4, 2003  December 8, 2003  December 4, 2003
                                                                      
         In light of the circumstances discussed in Note 7 to the consolidated
         condensed financial statements, including the unknown number of valid
       matrix claims and the unknown number and merits of valid downstream
         opt outs, it is not possible to predict the ultimate liability of the
     Company in connection with its diet drug legal proceedings. It is
   therefore not possible to predict whether, and if so when, such
    proceedings will have a material adverse effect on the Company's
    financial condition, results of operations and/or cash flows and
 whether cash flows from operating activities and existing and
          prospective financing resources will be adequate to fund the Company's
operations, pay all liabilities                             

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 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

    related to the diet drug litigation, pay dividends, maintain the
          ongoing programs of capital expenditures, and repay both the principal
          and interest on its outstanding obligations without the disposition of
       significant strategic core assets and/or reductions in certain cash
outflows.                                                   

Certain Factors that May Affect Future Results              
----------------------------------------------              

Prempro / Premarin - HT Studies                             

     In July 2002, the HT subset of the WHI study, involving women who
          received a combination of conjugated estrogens and medroxyprogesterone
          acetate (PREMPRO), was stopped early (after the patients were followed
       in the study for an average of 5.2 years) because, according to the
  predefined stopping rule, certain increased risks exceeded the
         specified long-term benefits. Additional analyses of data from the HT
  subset of the WHI study were released during 2003, and further
analyses of WHI data may be released in the future.         

        In early March 2004, the NIH announced preliminary findings from the
          estrogen-only arm of the WHI study and that it had decided to stop the
        study because they believed that the results would not likely change
   during the period until completion of the study in 2005 and the
   increased risk of stroke seen in the treatment arm could not be
          justified by what could be learned in an additional year of treatment.
       NIH concluded that estrogen alone does not appear to affect (either
         increase or decrease) coronary heart disease and did not increase the
       risk of breast cancer. In addition, NIH found an association with a
       decrease in the risk of hip fracture. This increased risk of stroke
       was similar to the increase seen in the HT subset of the WHI study.
       NIH also stated that analysis of preliminary data from the separate
      Women's Health Initiative Memory Study (WHIMS) showed an increased
       risk of probable dementia and/or mild cognitive impairment in women
          age 65 and older when data from both the PREMARIN and PREMPRO arm were
     pooled. The study also reported a trend towards increased risk of
      possible dementia in women treated with PREMARIN alone. WHIMS data
      published in the Journal of American Medical Association (JAMA) in
         June 2004 and in a separate report published in JAMA at the same time
  indicated that HT did not improve cognitive impairment and may
         adversely affect it in some women. The Company will work with the FDA
          to update the labeling for its HT products to include the latest data.

          Sales of PREMPRO and other PREMARIN family products have been and will
      continue to be adversely affected by the WHI results. Based on the
   most recent available market data, average weekly prescriptions
         written for PREMPRO and PREMARIN decreased approximately 77% and 54%,
        respectively, compared with the average weekly prescriptions written
      during the eight-week period preceding the 2002 termination of the
study subset.                                               

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

Set forth below are individual product operating results for
          Prempro/Premphase and Premarin for the three and six months ended June
30, 2004 and 2003:                                          

                     Prempro/Premphase
                   -----------------------------------------
                 Three Months             Six Months
                  Ended June 30,          Ended June 30,
                   -----------------       -----------------
(In millions)       2004       2003         2004       2003 
-------------      ------     ------       ------     ------
Net revenue         $59.7      $22.1       $117.0     $165.0
Gross profit         46.5       (8.4)        90.2      115.1

                    Premarin
                   -----------------------------------------
                 Three Months             Six Months
                  Ended June 30,          Ended June 30,
                   -----------------       -----------------
(In millions)       2004       2003         2004      2003  
-------------      ------     ------       ------     ------
Net revenue        $163.0     $254.5       $371.6     $514.3
Gross profit        131.7      223.5        310.0      456.7

   The Company recorded a $60.0 million reserve in the 2003 second
        quarter for anticipated returns in connection with a projected shift
       in prescriptions toward the approved lower dosage forms of PREMPRO.
       This $60.0 million reserve was calculated by reviewing wholesalers'
   inventory levels as of June 30, 2003, after deducting projected
     PREMPRO sales by wholesalers using the first-in, first-out (FIFO)
     method and excluding "out of date" inventory (it is the Company's
    policy to accept returns of product with expiration dates of six
         months or less). Due to higher than anticipated sales of the original
  formulations of PREMPRO, a portion of the inventory previously
        reserved was sold by wholesalers. Based on current demand forecasts,
        wholesalers' inventory levels and expiration dating of the remaining
         inventory held by the wholesalers, the Company reduced the reserve by
          $20.0 million in the 2004 second quarter. The remaining reserve, which
     approximated $40.0 million at June 30, 2004, is expected to fully
  reserve the value of the remaining inventory. The Company will
continue to monitor the adequacy of this reserve.           

Competition                                                 

     The Company operates in the highly competitive pharmaceutical and
      consumer health care industries. PREMARIN, the Company's principal
         conjugated estrogens product manufactured from pregnant mare's urine,
       and related products PREMPRO and PREMPHASE (which are single tablet
          combinations of the conjugated estrogens in PREMARIN and the progestin
        medroxyprogesterone acetate) are the leaders in their categories and
      contribute significantly to net revenue and results of operations.
      PREMARIN's natural composition is not subject to patent protection
   (although PREMPRO has patent protection). PREMARIN, PREMPRO and
PREMPHASE are                                               

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 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

         indicated for the treatment of certain menopausal symptoms. They also
          are approved for the prevention of osteoporosis, a condition involving
   a loss of bone mass in postmenopausal women. Their use for that
      purpose in women without symptoms should be limited to cases where
        non-hormonal treatments have been seriously considered and rejected.
          Estrogen-containing products manufactured by other companies have been
     marketed for many years for the treatment of menopausal symptoms.
      During the past several years, other manufacturers have introduced
     products for the treatment and/or prevention of osteoporosis. New
       products containing different estrogens and/or different progestins
         than those found in PREMPRO and PREMPHASE, utilizing various forms of
          delivery and having many forms of the same indications, also have been
         introduced. Some companies have also attempted to obtain approval for
       generic versions of PREMARIN. These products, if approved, would be
        routinely substitutable for PREMARIN and related products under many
          state laws and third-party insurance payer plans. In May 1997, the FDA
  announced that it would not approve certain synthetic estrogen
         products as generic equivalents of PREMARIN given known compositional
   differences between the active ingredient of these products and
         PREMARIN. Although the FDA has not approved any generic equivalent to
         PREMARIN to date, PREMARIN will continue to be subject to competition
       from existing and new competing estrogen and other products for its
       approved indications and may be subject to generic competition from
    either synthetic or natural conjugated estrogens products in the
       future. One other company has announced that it has applied for FDA
   approval of a generic version of PREMARIN derived from the same
       natural source. Following a bench trial in November 2002, a federal
        court found, in an order issued on October 2, 2003, that the company
         which had developed the estrogens to be used in this product, Natural
       Biologics, Inc., had misappropriated certain of the Company's trade
          secrets relating to the manufacture of PREMARIN. The court has entered
         a permanent injunction that, inter alia, bars Natural Biologics, Inc.
         from using the misappropriated trade secrets and from engaging in the
      research, development, production or manufacture of estrogens from
urine. Wyeth v. Natural Biologics, Inc., et al., No. 98-2469
      (JNE/JGL), U.S.D.C., D. Minn. Natural Biologics, Inc. has filed an
      appeal from the court's injunction. The Company cannot predict the
         timing or outcome of the appeal or other efforts by any other company
to seek FDA approval for generic versions of PREMARIN.      

  On August 4, 2004, Eli Lilly received FDA approval for its new
         antidepressant, CYMBALTA, which, like EFFEXOR XR, inhibits the uptake
    of serotonin and norepinephrine in the brain. It is unclear what
        effect this new drug may have on EFFEXOR XR sales. Growth in overall
      usage in atidepressants in the United states appears to be slowing
         for a variety of reasons. EFFEXOR continues to outperform the overall
         category, but the Company cannot be certain that trend will continue.

Product Supply                                              

          Market demand for ENBREL is strong; however, the sales growth had been
       constrained by limits on the existing source of supply. In December
2002, the retrofitted Rhode                                 

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 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

  Island facility owned by Amgen was completed and manufacturing
   production was approved by the FDA. Consequently, manufacturing
          capacity for ENBREL significantly increased in 2003. Market demand has
         continued to grow and additional manufacturing supply is projected to
          be required. In April 2002, Immunex (prior to being acquired by Amgen)
       announced it entered into a manufacturing agreement with Genentech,
      Inc. to produce ENBREL beginning in 2004, subject to FDA approval.
         Although production is still expected in 2004 under this arrangement,
   certain milestones under the manufacturing agreement, including
       obtaining FDA approval for the manufacturing process, have not been
      met in the planned timeframe. The current plan for the longer term
 includes an additional manufacturing facility, which is being
        constructed by the Company in Ireland, and increased capacity at the
     Rhode Island facility, both of which are expected to be completed
during 2005.                                                

          As a result of delays in product availability of PREVNAR due to a late
        2003 shutdown of the filling lines at the Company's Pearl River, New
    York facility as well as other manufacturing and testing issues,
         product availability was constrained in all markets through the first
   half of 2004. During the first quarter of 2004, the Centers for
          Disease Control and Prevention (CDC) issued interim recommendations to
       defer administration of the 3rd and 4th doses for healthy children.
Due to increased product availability, the CDC revised these
         recommendations in early July to recommend that Health Care Providers
        defer only the 4th dose for healthy children and initiate efforts to
       vaccinate those children who had the 3rd dose deferred. In March of
      2004, the European Agency for the Evaluation of Medicinal Products
        issued interim dosing recommendations to reduce usage. To date these
      recommendations have not been revised. Capacity should be enhanced
          overall in 2004 due to internal improvements and the FDA approval of a
   third party filling facility in the second quarter of 2004. The
     Company continues to believe 2004 production will exceed the 2003
level of 20 million doses.                                  

Supply Chain                                                

       Management continually reviews the Company's supply chain structure
   with respect to utilization of production capacities as well as
      manufacturing efficiencies. Changes in product demand periodically
          create capacity imbalances within the manufacturing network. When such
       imbalances result in overcapacity, which management considers to be
     other than temporary, the network is restructured to gain optimal
      efficiency and to reduce production costs. As a result, additional
restructuring charges may occur in future periods.          

Litigation and Contingent Liabilities                       

   The Company is involved in various legal proceedings, including
       product liability and environmental matters that arise from time to
          time in the ordinary course of business, the most significant of which
are described in the Company's Annual Report on Form 10-K   

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

        for the year ended December 31, 2003, the Company's Quarterly Report
      on Form 10-Q for the quarter ended March 31, 2004, interim Current
      Reports filed on Form 8-K, and this Quarterly Report on Form 10-Q.
       These include allegations of injuries caused by drugs, vaccines and
       over-the-counter products, including PONDIMIN (which in combination
         with phentermine, a product that was not manufactured, distributed or
        sold by the Company, was commonly referred to as "fen-phen"), REDUX,
the prior formulation of DIMETAPP, the prior formulation of 
    ROBITUSSIN, PREMPRO and PREMARIN, among others. In addition, the
    Company has responsibility for environmental, safety and cleanup
          obligations under various local, state and federal laws, including the
         Comprehensive Environmental Response, Compensation and Liability Act,
commonly known as Superfund.                                

        The estimated costs that the Company expects to pay are accrued when
         the liability is considered probable and the amount can be reasonably
 estimated (see Note 7 to the consolidated condensed financial
          statements for a discussion of the costs associated with the REDUX and
PONDIMIN diet drug litigation). In many cases, future       
  environmental-related expenditures cannot be quantified with a
          reasonable degree of accuracy. As investigations and cleanups proceed,
  environmental-related liabilities are reviewed and adjusted as
         additional information becomes available. Prior to November 2003, the
    Company was self-insured for product liability risks with excess
      coverage on a claims-made basis from various insurance carriers in
    excess of the self-insured amounts and subject to certain policy
  limits. Effective November 2003, the Company became completely
   self-insured for product liability risks. It is not possible to
     predict whether any potential liability that might exceed amounts
        already accrued will have a material adverse effect on the Company's
         financial condition, results of operations and/or cash flows. This is
       discussed in greater detail in Note 7 to the consolidated condensed
financial statements.                                       

Cautionary Statements Regarding Forward-Looking Information 
----------------------------------------------------------- 

         The Private Securities Litigation Reform Act of 1995 provides a "safe
          harbor" for forward-looking statements. Forward-looking statements may
     appear in periodic reports filed with the Securities and Exchange
       Commission (including the Company's Annual Reports on Form 10-K and
        Quarterly Reports on Form 10-Q), in press releases, in the Company's
        Annual Report to Stockholders and other reports to stockholders, and
      in other communications made by the Company. These forward-looking
statements can be identified by their use of words such as  
       "anticipates," "expects," "is confident," "plans," "could," "will,"
       "believes," "estimates," "forecasts," "projects" and other words of
     similar meaning. These forward-looking statements address various
matters including:                                          

   o    our anticipated results of operations, liquidity position,
financial condition and capital resources;        

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

  o    the benefits that we expect will result from our business
            activities and certain transactions we announced or completed,
         such as increased revenues, decreased expenses, and avoided
expenses and expenditures;                        
  o    statements of our expectations, beliefs, future plans and
             strategies, anticipated developments and other matters that are
not historical facts;                             
  o    the timing and successfulness of research and development
activities;                                       
o    trade buying patterns;                                 
o    the impact of competitive or generic products;         
o    the impact of changes in generally accepted accounting 
principles;                                       
          o    costs related to product liability, patent protection, government
investigations and other legal proceedings;       
    o    our ability to protect our intellectual property, including
patents;                                          
   o    the impact of legislation or regulation affecting pricing,
reimbursement or access,                          
both in the United States and internationally;    
    o    the impact of managed care or health care cost-containment;
 o    governmental laws and regulations affecting our U.S. and
             international businesses, including tax obligations and results
of tax audits;                                    
o    environmental liabilities;                             
      o    the accuracy of our estimates and assumptions utilized in our
critical accounting policies;                     
          o    the future impact of presently known trends, including those with
respect to product performance and competition;   
o    future demand for our products;                        
o    anticipated changes in product mix;                    
       o    anticipated developments relating to sales of PREMPRO/PREMARIN
       family of products and ENBREL and PREVNAR product supply;
   o    anticipated amounts of future contractual obligations; and
       o    the potential impact of litigation including litigation, inter
           alia, relating to PREMPRO, PREMARIN, the prior formulation of
              ROBITUSSIN and the prior formulation of DIMETAPP; the nationwide
         class action settlement relating to REDUX and PONDIMIN; and
          additional litigation charges related to REDUX and PONDIMIN,
        including those for opt outs from the national settlement.

     All forward-looking statements address matters involving numerous
        assumptions, risks and uncertainties, which may cause actual results
       to differ materially from those expressed or implied by us in those
          statements. Accordingly, we caution you not to place undue reliance on
        these forward-looking statements, which speak only as of the date on
        which they were made. From time to time, we also may provide oral or
       written forward-looking statements in other materials we release to
    the public. Additionally, we undertake no obligation to publicly
        update or revise any forward-looking statements, whether as a result
         of new information, future developments or otherwise. As permitted by
        the Private Securities Litigation Reform Act of 1995, the Company is
 hereby filing the following cautionary statements identifying
important factors, which among others, could                

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

         cause the Company's actual results to differ materially from expected
and historical results:                                     

     Economic factors over which we have no control such as changes in
    business and economic conditions, including, but not limited to,
  inflation and fluctuations in interest rates, foreign currency
     exchange rates and market value of our equity investments and any
impacts of war or threatened or actual terrorist activity;  

          Interruptions of computer and communication systems including computer
        viruses, that could impair the Company's ability to conduct business
and communicate internally or with its customers;           

        Increasing pricing pressures, both in and outside the United States,
       resulting from continued consolidation among health care providers,
    rules and practices of managed care groups and institutional and
         governmental purchasers, judicial decisions and governmental laws and
      regulations relating to Medicare, Medicaid and health care reform,
pharmaceutical reimbursement and pricing in general;        

  Competitive factors, such as (i) new products developed by our
          competitors that have lower prices or superior performance features or
  that are otherwise competitive with our current products; (ii)
         technological advances and patents attained by our competitors; (iii)
        changes in promotional regulations or practices; (iv) development of
         alternative therapies; (v) potential generic competition for PREMARIN
          and for other health care products as such products mature and patents
        or marketing exclusivity expire on such products; (vi) problems with
      licensors, suppliers and distributors; (vii) business combinations
    among our competitors and major customers; and (viii) ability to
attract and retain management and other key employees;      

    Government laws and regulations affecting U.S. and international
     operations, including (i) trade, monetary and fiscal policies and
          taxes; (ii) price controls, or reimbursement or access policies; (iii)
       drug importation legislation; (iv) changes in governments and legal
    systems; (v) tax obligations and results of tax audits; and (vi)
     regulatory approval processes affecting approvals of products and
      licensing, including, without limitation, uncertainties of the FDA
  approval process that may delay or prevent the approval of new
products and result in lost market opportunity;             

        Difficulties and delays inherent in pharmaceutical research, product
          development, manufacturing and commercialization, such as, (i) failure
       of new product candidates to reach market due to efficacy or safety
        concerns, inability to obtain necessary regulatory approvals and the
      difficulty or excessive cost to manufacture; (ii) the inability to
 identify viable new chemical compounds; (iii) difficulties in
 successfully completing clinical trials; (iv) difficulties in
          manufacturing complex products, particularly biological products, on a
      commercial scale; (v) difficulty in gaining and maintaining market
        acceptance of approved products; (vi) seizure or recall of products;
         (vii) the failure to obtain, the imposition of limitations on the use
of, or loss of patent and other intellectual                

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 Management's Discussion and Analysis of Financial Condition
 and Results of Operations
 Three Months and Six Months Ended June 30, 2004

property rights; (viii) failure to comply with current Good 
        Manufacturing Practices and other applicable regulations and quality
   assurance guidelines that could lead to temporary manufacturing
         shutdowns, product shortages and delays in product manufacturing; and
(ix) other manufacturing or distribution problems;          

 Difficulties or delays in product manufacturing or marketing,
      including but not limited to, the inability to build up production
        capacity commensurate with demand, the inability of our suppliers to
        provide raw material, or the failure to predict market demand for or
to gain market acceptance of approved products;             

  Unexpected safety or efficacy concerns arising with respect to
          marketed products, whether or not scientifically justified, leading to
          product recalls, withdrawals, regulatory action on the part of the FDA
(or foreign counterparts) or declining sales;               

        Growth in costs and expenses, changes in product mix, and the impact
        of any acquisitions or divestitures, restructuring and other unusual
         items that could result from evolving business strategies, evaluation
of asset realization and organizational restructuring;      

Legal difficulties, any of which can preclude or delay      
         commercialization of products or adversely affect profitability, such
          as (i) product liability litigation related to our products including,
        without limitation, litigation associated with the prior formulation
        of DIMETAPP, the prior formulation of ROBITUSSIN, PREMPRO, PREMARIN,
      and our former diet drug products, REDUX and PONDIMIN; (ii) claims
       asserting violations of antitrust, securities, or other laws; (iii)
  tax matters; (iv) intellectual property disputes or changes in
intellectual property legal protections and remedies; (v)   
        environmental matters, including obligations under the Comprehensive
          Environmental Response, Compensation and Liability Act, commonly known
          as Superfund; and (vi) complying with the consent decree with the FDA;

        Fluctuations in buying patterns of major distributors, retail chains
      and other trade buyers which may result from seasonality, pricing,
wholesaler buying decisions or other factors;               

Changes in accounting standards promulgated by the Financial
   Accounting Standards Board, the Emerging Issues Task Force, the
     Securities and Exchange Commission, and the American Institute of
      Certified Public Accountants, which may require adjustments to our
financial statements; and                                   

      The other factors identified above under "Certain Factors that May
Affect Future Results."                                     

     This list should not be considered an exhaustive statement of all
potential risks and uncertainties.                          

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Item 3.   Quantitative and Qualitative Disclosures about Market Risk            
----------------------------------------------------------  

          The market risk disclosures appearing on page 70 of the Company's 2003
        Annual Report as incorporated by reference in the Form 10-K have not
         materially changed from December 31, 2003. At June 30, 2004, the fair
  values of the Company's financial instruments were as follows:

                                               Carrying         Fair
                               Notional/         Value           Value
     (In millions)             Contract         ----------------------
    Description                Amount           Assets (Liabilities)
     ---------------------     ---------        ----------------------
      Forward contracts (1)      $1,453.7           $(2.8)        $(2.8)
      Option contracts (1)          657.2           (11.8)        (11.8)
      Interest rate swaps         5,300.0           (49.5)        (49.5)
      Outstanding debt (2)        7,976.3        (7,926.7)     (8,246.8)

   (1)  If the U.S. dollar were to strengthen or weaken by 10%, in
               relation to all hedged foreign currencies, the net payable on the
        forward and option contracts would decrease or increase by
approximately $113.9.                             

  (2)  If the interest rates were to increase or decrease by one
            percentage point, the fair value of the outstanding debt would
decrease or increase by approximately $667.3.     

          The estimated fair values approximate amounts at which these financial
   instruments could be exchanged in a current transaction between
        willing parties. Therefore, fair values are based on estimates using
       present value and other valuation techniques that are significantly
        affected by the assumptions used concerning the amount and timing of
       estimated future cash flows and discount rates that reflect varying
          degrees of risk. Specifically, the fair value of forward contracts and
          interest rate swaps reflects the present value of the future potential
          loss if settlement were to take place on June 30, 2004; the fair value
          of option contracts reflects the present value of future cash flows if
      the contracts were settled on June 30, 2004; and the fair value of
         outstanding debt instruments reflects a current yield valuation based
on observed market prices as of June 30, 2004.              

Item 4.   Controls and Procedures                                               
-----------------------                                     

         As of June 30, 2004, the Company carried out an evaluation, under the
       supervision and with the participation of the Company's management,
         including the Chief Executive Officer and Chief Financial Officer, of
  the effectiveness of the design and operation of the Company's
    disclosure controls and procedures pursuant to Exchange Act Rule
       13a-15. Based upon that evaluation, the Chief Executive Officer and
   Chief Financial Officer concluded that the Company's disclosure
  controls and procedures are reasonably effective in design and
       practice to alert them, in a timely manner, to material information
     relating to the Company (including its consolidated subsidiaries)
         required to be included in the Company's periodic SEC filings. During
   the 2004 second quarter, there were no changes in the Company's
      internal control over financial reporting or in other factors that
         could materially affect the Company's internal control over financial
          reporting, nor were any corrective actions required to be taken by the
          Company with regard to significant deficiencies or material weaknesses
in internal control over financial reporting.               

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 Part II - Other Information
 ---------------------------

Item 1.   Legal Proceedings                                                     
-----------------                                           

         The Company and its subsidiaries are parties to numerous lawsuits and
        claims arising out of the conduct of its business, including product
       liability and other tort claims, the most significant of which have
      been described in the Company's Annual Report on Form 10-K for the
       year ended December 31, 2003, Quarterly Report on Form 10-Q for the
      quarter ended March 31, 2004 and items filed in Current Reports on
Form 8-K in 2004.                                           

       The REDUX and PONDIMIN diet drug litigation is discussed in greater
        detail in Note 7 to the consolidated condensed financial statements,
under the caption "Contingencies and Commitments."          

        Through June 30, 2004, payments into the REDUX and PONDIMIN national
          settlement funds, individual settlement payments, legal fees and other
      costs totaling $13,338.7 million were paid and applied against the
 litigation accrual. At June 30, 2004, $3,261.3 million of the
litigation accrual remained.                                

      In a joint motion filed in the U.S. District Court for the Eastern
         District of Pennsylvania on May 4, 2004, the Company, counsel for the
         plaintiff class in the nationwide settlement and counsel for a number
        of individual class members moved to stay for 60 days the processing
 and payment of Level I and Level II matrix claims and certain
         associated court proceedings. That motion was granted by the court on
      May 10, 2004. The stay was intended to provide the parties with an
       opportunity to draft and submit to the court a Seventh Amendment to
      the settlement agreement that would create a new claims processing
         structure, funding arrangement and payment schedule for these claims.
    On July 13, 2004 the District Court extended the stay, which had
         expired on July 9, 2004, until July 21, 2004. On July 21, the parties
         informed the Court that an agreement had been reached on the terms of
      the proposed Seventh Amendment and that the parties had placed the
        signed agreement in escrow with the Court's Special Master while the
  parties finalized the exhibits to the agreement, including the
      proposed Form of Notice to the class. At the parties' request, the
        Court extended the stay on the processing and payment of Level I and
         Level II claims until August 4, 2004. On August 5, the stay was again
       extended, through August 10, 2004. If the parties file a motion for
        preliminary approval of the proposed Seventh Amendment by August 10,
    the stay will automatically be extended until the District Court
enters an order granting or denying that motion.            

  The proposed Seventh Amendment would require preliminary court
         approval, notice to the class and an opportunity for class members to
    opt out of the Seventh Amendment process, final agreement by the
        Company following the opt out period, trial court approval and final
      judicial approval. If finalized and approved, the proposed Seventh
Amendment would include the following key terms:            

  o    The amendment would create a new Supplemental Fund, to be
               administered by a Fund Administrator who will be appointed by the
          District Court and who will process the Level I and Level II
matrix claims;                                    

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          o    The Company would make initial payments of up to $50.0 million to
              facilitate the establishment of the Supplemental Fund. Following
             approval by the federal court overseeing the settlement and any
            appellate courts, the Company would make an initial payment of
        $400.0 million. The timing of additional payments would be
              dictated by the rate of review and payment of claims by the Fund
            Administrator. The Company would ultimately deposit a total of
             $1,275.0 million, net of certain credits, into the Supplemental
Fund;                                             

          o    All current matrix Level I and II claimants who qualify under the
              Seventh Amendment, who pass the Settlement Fund's medical review
          and who otherwise satisfy the requirements of the settlement
    would receive a pro rata share of the $1,275.0 million
              Supplemental Fund, after deduction of certain expenses and other
           amounts from the Supplemental Fund. The pro rata amount would
          vary depending upon the number of claimants who pass medical
              review, the nature of their claims, their age and other factors.
        A Seventh Amendment participant who does not qualify for a
             payment after such medical review would be paid $2,000 from the
Supplemental Fund;                                
;                                                                               
      o    Participating class members who would in the future have been
          eligible to file Level I and Level II matrix claims would be
             eligible to receive a $2,000 payment from the settlement Trust;
               such payments would be funded by the Company apart from its other
funding obligations under the national settlement;

     o    If the participants in the Seventh Amendment have surgery or
             other more serious medical conditions on Matrix Levels III-V by
           the earlier of fifteen years from the date of their last diet
       drug ingestion or by December 31, 2011, they would remain
               eligible to submit claims to the existing settlement Trust and be
               paid the current matrix amounts if they qualify for such payments
             under terms modified by the Seventh Amendment. In the event the
          existing settlement Trust is unable to pay those claims, the
Company would guarantee payment; and              

     o    Class members would have the right to opt out of the Seventh
        Amendment and to remain bound by the terms of the existing
             national settlement. The Company, however, would have the right
              to withdraw from the Seventh Amendment if participation by class
               members is inadequate or for other reasons. All class members who
            participate in the Seventh Amendment would give up any further
          opt-out rights. Approval of the Seventh Amendment would also
              preclude any lawsuits by the Trust or the Company to recover any
               amounts previously paid to class members by the Trust, as well as
               terminate the Claims Integrity Program as to all claimants who do
not opt out of the Seventh Amendment.             

      There can be no assurance that the Company will ultimately proceed
    with the amendment (based upon the level of participation in the
  amendment or for other reasons), or that the amendment will be
approved by the court and upheld on appeal.                 

       As of July 19, 2004, approximately 53,000 individuals who had filed
     Intermediate or Back-End opt out forms had served lawsuits on the
     Company. The claims of approximately 42% of the plaintiffs in the
     Intermediate and Back-End opt out cases served on the Company are
     pending in federal court, with approximately 36% pending in state
   courts. The claims of approximately 22% of the Intermediate and
      Back-End opt out plaintiffs have been removed from state courts to
      federal court, but are still subject to a possible remand to state
court. The Company expects to challenge vigorously all      

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        Intermediate and Back-End opt out claims of questionable validity or
         medical eligibility and a number of cases have already been dismissed
       on eligibility grounds. However, the total number of filed lawsuits
          that meet the settlement's opt out criteria will not be known for some
        time. As a result, the Company cannot predict the ultimate number of
     purported Intermediate or Back-End opt outs that will satisfy the
settlement's opt out requirements, but that number could be 
        substantial. As to those opt outs who are found eligible to pursue a
       lawsuit, the Company also intends to vigorously defend these cases.

      On July 27, 2004, a Philadelphia jury in the Pennsylvania Court of
       Common Pleas, First Judicial District, hearing the Intermediate opt
        out cases of Istnick v. Wyeth, et al., No. 021200268, and Clepper v.
 Wyeth, et al., No. 021202456, returned a verdict finding that
          plaintiff Istnick had not been damaged by her use of PONDIMIN and that
          plaintiff Clepper had been damaged in the amount of $48,000 by the use
         of PONDIMIN. The Istnick case was thereupon dismissed and the parties
        resolved the Clepper case. On July, 30, 2004, a Philadelphia jury in
    the Pennsylvania Court of Common Pleas, First Judicial District,
         hearing the Intermediate opt out case of Cannon v. Wyeth, et al., No.
       021201534, returned a defense verdict finding that plaintiff Cannon
had not proven that she had valvular heart disease. The     
   Istnick/Clepper and the Cannon cases were tried under a reverse
          bifurcation procedure, in which the parties first try the issue of the
          plaintiff's alleged injury and damages, and only proceed to a trial of
          the Company's liability for the jury's award if any damages are found.
     Because the Istnick/Clepper and Cannon cases were resolved by the
      damage phase, the cases did not proceed to the liability phase. On
    August 6, 2004, a Philadelphia jury in the Pennsylvania Court of
        Common Pleas, First Judicial District, hearing the combined Back-End
      opt out cases of Davis v. Wyeth, et al., No. 021101477, Sidwell v.
          Wyeth, et al., No. 021101431, Roberts v. Wyeth, et al., No. 021102564,
       May v. Wyeth, et al., No. 021103564, and Rogowski v. Wyeth, et al.,
         No. 021201594 returned a verdict in favor of the plaintiffs, awarding
       plaintiff Davis $1,000 in damages and the remaining plaintiffs $750
each in damages.                                            

    On April 27, 2004, a jury in Beaumont, Texas hearing the case of
  Coffey, et al. v. Wyeth, et al., No. E-167,334, 172nd Judicial
          District Court, Jefferson Cty., TX, returned a verdict in favor of the
      plaintiffs for $113.353 million in compensatory damages and $900.0
         million in punitive damages for the wrongful death of the plaintiffs'
         decedent, allegedly as a result of PPH caused by her use of PONDIMIN.
      On May 17, 2004, the trial court entered judgment on behalf of the
         plaintiffs for the full amount of the jury's verdict, as well as $4.2
      million in pre-judgment interest and $188,737 in guardian ad litem
        fees. On July 26, 2004, the trial court denied in their entirety the
         Company's motions for a new trial or for judgment notwithstanding the
       verdict, including the Company's request for application of Texas's
        statutory cap on punitive damage awards. The Company intends to file
       an appeal from the judgment entered by the trial court and believes
        that it has strong arguments for reversal or reduction of the awards
       on appeal due to the significant number of legal errors made during
        trial and in the charge to the jury and due to a lack of evidence to
      support aspects of the verdict. In connection with its appeal, the
        Company will be required to post a bond, which, under Texas law, may
        not exceed $25.0 million. The appeal process is expected to take one
to two years at a minimum.                                  

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         As of July 16, 2004, the Company was a defendant in approximately 350
         lawsuits in which the plaintiff alleges a claim of PPH, alone or with
       other alleged injuries. Almost all of these claimants must meet the
       definition of PPH set forth in the national settlement agreement in
   order to pursue their claims outside of the national settlement
        (payment of such claims, by settlement or judgment, would be made by
          the Company and not the Trust). Approximately 75 of these cases appear
          to be eligible to pursue a PPH lawsuit under the terms of the national
          settlement. In approximately 50 of these cases the Company expects the
          PPH claims to be voluntarily dismissed by the claimants (although they
      may continue to pursue other claims). In approximately 45 of these
          cases the Company has filed or expects to file motions under the terms
          of the national settlement to preclude plaintiffs from proceeding with
 their PPH claims. For the balance of these cases, the Company
       currently has insufficient medical information to assess whether or
   not the claimants meet the definition of PPH under the national
         settlement. The Company continues to work toward resolving the claims
         of individuals who allege that they have developed PPH as a result of
          their use of the diet drugs and intends vigorously to defend those PPH
cases that cannot be resolved prior to trial.               

   In the litigation involving PREMARIN and PREMPRO, the Company's
 estrogen and estrogen/progestin therapies, respectively, four
       additional putative class action lawsuits have been filed. Three of
        the new class actions have been filed in West Virginia. The putative
     class representative in Michael, et al. v. Wyeth Pharmaceuticals,
          Inc., et al., No. 2:04-0435 (U.S.D.C., S.D. W.Va.), seeks to represent
       a class of all women in the United States who ingested prescription
       hormone therapy (HT) medication prior to July 9, 2002 and allegedly
   suffered personal injury as a result. Compensatory and punitive
          damages are sought. The putative class representative in Green, et al.
          v. Wyeth, Inc., et al., No. 3:04-0700 (U.S.D.C., S.D. W.Va.), seeks to
       represent a class of all residents of Arizona, California, Georgia,
          Illinois, Indiana, Ohio, Oregon, Pennsylvania, Texas and West Virginia
        who used HT and allegedly suffered personal injuries, as well as all
  residents of other states who were prescribed the product by a
          physician licensed and practicing in one of the 10 specified states or
        who were injured by the product in one of those states. Compensatory
          damages, medical monitoring costs and punitive damages are sought. The
          putative class representatives in Barker, et al. v. Wyeth, et al., No.
        04-C-1932 (U.S.D.C., S.D. W.Va.) are seeking to represent a class of
   West Virginia women who used HT and allegedly suffered personal
          injuries, as well as all residents of other states who were prescribed
     HT by a physician licensed and practicing in West Virginia or who
          received patient information about HT that had been provided by one or
    more of the defendants to West Virginia physicians. Compensatory
          damages, medical monitoring costs and punitive damages are sought. The
        fourth new class action, Vitanza, et al. v. Wyeth, Inc., et al., No.
          ATL-L-2093-04 (N.J. Super. Ct., Atlantic Cty.), seeks certification of
     a class of New Jersey residents who have used PREMPRO and are not
   suffering from breast cancer or coronary heart disease, but are
        allegedly at increased risk for such diseases. Medical monitoring is
      the sole form of relief sought. The Company is currently defending
       approximately 1,870 actions in various courts for personal injuries
      allegedly arising out of the use of PREMARIN or PREMPRO, including
         breast cancer, stroke and heart disease. Together, these cases assert
      claims on behalf of approximately 3,136 women allegedly injured by
PREMPRO or PREMARIN.                                        

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        On July 9, 2002, interim findings from the Women's Health Initiative
        (WHI) study evaluating HT were released. The estrogen plus progestin
        arm of the study (in which the Company's PREMPRO product was used as
     the study drug) was stopped early because of findings of slightly
       increased risks of breast cancer, stroke and coronary heart disease
    among the women taking the drug compared to those in the placebo
  group. The arm of the study relating to the Company's PREMARIN
      conjugated estrogens product continued through March 2004 when the
      National Institutes of Health (NIH) announced preliminary findings
          from the estrogen-only arm of the WHI study and that it had decided to
          stop the study because they believed that the results would not likely
          change during the period until completion of the study in 2005 and the
   increased risk of stroke seen in the treatment arm could not be
          justified by what could be learned in an additional year of treatment.
      NIH concluded that estrogen alone did not appear to affect (either
         increase or decrease) coronary heart disease and did not increase the
       risk of breast cancer. In addition, NIH found an association with a
       decrease in the risk of hip fracture. This increased risk of stroke
       was similar to the increase seen in the HT subset of the WHI study.
          Data from the Women's Health Initiative Memory Study (WHIMS) showed an
        increased risk of probable dementia and/or mild cognitive impairment
          in women age 65 and older when data from both the PREMARIN and PREMPRO
      arm were pooled. The study also reported a trend towards increased
         risk of possible dementia in women treated with PREMARIN alone. WHIMS
        data published in the Journal of American Medical Association (JAMA)
       in June 2004 and in a separate report published in JAMA at the same
       time indicated that HT did not improve cognitive impairment and may
         adversely affect it in some women. The Company will work with the FDA
          to update the labeling for its HT products to include the latest data.

      In the litigation involving the Company's cough/cold products that
      contained the ingredient phenylpropanolamine (PPA), the Company is
        currently a named defendant in approximately 741 lawsuits (on behalf
      of a total of approximately 1,234 plaintiffs). Seventeen PPA cases
        involving the Company are currently scheduled for trial during 2004.

     In the litigation alleging that the administration of one or more
  vaccines containing thimerosal, a preservative used in certain
      vaccines manufactured and distributed by the Company as well as by
   other vaccine manufacturers, causes severe neurological damage,
      including autism, the Company has been served with 367 lawsuits in
         various state and federal courts involving 942 vaccine recipients. Of
   those 942 vaccine recipients, 479 have also filed petitions for
       compensation in the United States Court of Federal Claims under the
   provisions of the federal Vaccine Compensation Act (the Vaccine
          Court). Of these 479 Vaccine Court petitioners, 42 have withdrawn from
    Vaccine Court (32 of whom are currently proceeding with lawsuits
          against the Company), and 407 of those currently proceeding in Vaccine
     Court have had their petitions in that Court pending for over 240
        days. Absent a Vaccine Court judgment, Vaccine Court petitioners are
          first eligible to withdraw from Vaccine Court 240 days after they file
        their petitions. Currently there are over 4,000 petitions pending as
    part of an Omnibus Autism Proceeding in Vaccine Court, but it is
       unknown how many of those petitioners received one or more vaccines
manufactured and distributed by the Company.                

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         Broadview Pharmacy, a retail pharmacy located in Toronto, Canada, has
    filed an application for leave to file a private application for
    remedial relief with Canada's Competition Tribunal against Wyeth
        Canada under Section 75 of Canada's Competition Act. The application
     alleges that Wyeth Canada has refused to supply the pharmacy with
    Wyeth Canada's prescription pharmaceutical products. Pursuant to
          Canada's Competition Act, Broadview Pharmacy, if ultimately successful
        in obtaining leave and proceeding with an application, may obtain an
         order requiring Wyeth Canada to deal with Broadview on Wyeth Canada's
       ordinary and customary terms, but would not be entitled to monetary
damages.                                                    

     The Company has been named as a defendant in an action brought by
         Compass Marketing, Inc. alleging that Schering-Plough Corporation and
       Wyeth Consumer Healthcare violated federal and state antitrust laws
    and state common laws by allegedly engaging in certain collusive
  practices regarding commission rates and credit terms. Compass
       Marketing, Inc. v. Schering-Plough Corp., et al., No. 1:04-CV-1663,
 U.S.D.C., D. Md. Compass Marketing is a former Wyeth Consumer
          Healthcare broker that provided brokerage services for a small segment
     of the over-the-counter drug business. The complaint seeks treble
     damages under the federal antitrust laws, as well as punitive and
     exemplary damages on the state common law claims. The Company has
 answered the complaint denying the allegations and asserted a
          counterclaim for breach of contract. The complaint stems from the same
  allegations that Compass Marketing, Inc. made to the Antitrust
Division of the Department of Justice.                      

The Company has been named as a defendant, along with other 
        pharmaceutical manufacturers, in seven civil actions in Minneapolis,
          Minnesota federal District Court alleging that the defendant companies
    violated federal antitrust statutes and certain state antitrust,
    consumer protection and unfair trade practice laws by unlawfully
agreeing to engage in conduct to prevent U.S. consumers from
          purchasing defendants' prescription drugs from Canada. Iverson, et al.
   v. Pfizer, Inc., et al., No. 0:04-CV-02724, U.S.D.C., D. Minn.;
        Schafer, et al. v. Pfizer, Inc., et al., No. 0:04-CV-2763, U.S.D.C.,
       D. Minn.; Noonan, et al. v. Pfizer, Inc., et al., No. 0:04-CV-2898,
 U.S.D.C., D. Minn.; Koch, et al. v. Pfizer, Inc., et al., No.
         0:04-CV-2899, U.S.D.C., D. Minn.; United Senior Action of Indiana, et
     al. v. Pfizer, Inc. et al., No. 0:04-CV-2931, U.S.D.C., D. Minn.;
         Mills, et al. v. Pfizer, Inc., et al., No. 0:04-CV-3143, U.S.D.C., D.
         Minn.; Central Laborers Welfare Fund, et al. v. Pfizer, Inc., et al.,
    No. 0:04-CV-3198, U.S.D.C., D. Minn. These actions are purported
class actions filed on behalf of indirect purchasers of the 
         pharmaceutical companies' products. These plaintiffs claim that, as a
         result of the alleged unlawful agreement, the purported class members
       have paid higher prices for the defendants' pharmaceutical products
     than in the absence of the alleged agreement. The complaints seek
various forms of relief, including damages, treble damages, 
     restitution, disgorgement, injunctive relief and attorneys' fees.

      The Company, along with 43 other pharmaceutical manufacturers, has
      been named as a defendant in a suit filed by the City of New York.
   City of New York v. Abbott Laboratories, Inc., et al. U.S.D.C.,
          S.D.N.Y. No. 04-CV-06054. The complaint, which has not yet been served
         on Wyeth, alleges that all the defendants caused plaintiff to overpay
      for prescription drugs by inflating their Average Wholesale Prices
        (AWP), which determine the initial Medicaid price for the drugs, and
by deliberately miscalculating                              

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       their Best Price (BP) and Average Manufacturer's Price (AMP), which
        are used to calculate Medicaid rebates. Plaintiff seeks compensatory
        and punitive damages, as well as an accounting for all New York City
 drug purchases from 1992 to date. Plaintiff's counsel is also
prosecuting similar suits on behalf of Suffolk, Rockland and
         Westchester counties in New York state, in which cases the Company is
already named as a defendant.                               

        The Company has received notifications from Teva Pharmaceuticals USA
        (Teva), Sandoz, Inc. and Sun Pharmaceutical Advanced Research Centre
          Limited that Abbreviated New Drug Applications had been filed with the
        FDA seeking approval to market generic pantoprazole sodium 20 mg and
    40 mg delayed release tablets. Pantoprazole sodium is the active
     ingredient used in PROTONIX. The Orange Book lists two patents in
       connection with PROTONIX tablets. The first of these patents covers
       pantoprazole and expires in July 2010. The other listed patent is a
      formulation patent and expires in December 2016. Wyeth's licensing
       partner Altana Pharma AG (Altana) is the owner of these patents. In
        May 2004, Altana and the Company filed a lawsuit against Teva in the
  U.S. District Court for the District of New Jersey, Docket No.
        2:04-CV-02355, alleging infringement of the patent expiring in 2010.
       The Company intends, and is informed that Altana intends, to pursue
the causes of action under this litigation vigorously.      

   Boston Scientific brought a patent infringement lawsuit against
         Cordis, seeking to enforce a patent on stent coatings against Cordis'
    CYPHER sirolimus drug-eluting stent, Boston Scientific Scimed v.
    Cordis, Docket No. 03-283, U.S.D.C., D. Del. In an earlier filed
          action, Cordis sued Boston Scientific seeking to enforce Cordis' stent
          architecture patent. In the respective actions, both Boston Scientific
    and Cordis sought a preliminary injunction against the other. On
 November 21, 2003, the District Court denied both motions for
        preliminary injunction. Cordis appealed the denial of the injunction
          against Boston Scientific to the U.S. Court of Appeals for the Federal
   Circuit. In May 2004, the appellate court affirmed the District
       Courts' denial of the preliminary injunction. The case is scheduled
  for trial in 2005. Although the Company is not a party to this
     litigation, if Cordis were to be enjoined from selling the CYPHER
          stent, the Company could lose licensing income. Cordis has advised the
 Company that it intends to vigorously defend this litigation.

          The Company is cooperating in responding to the subpoena served on the
 Company on January 21, 2004 from the U.S. Office of Personnel
   Management, Office of the Inspector General, requesting certain
         documents related to EFFEXOR. The subpoena requests documents related
      principally to educating or consulting with physicians, as well as
       marketing or promotion of EFFEXOR to physicians or pharmacists from
 January 1, 1997 to September 30, 2003. Other manufacturers of
psychopharmacologic products have also received subpoenas.  

        The Company has settled the Notice of Violation served by the Office
       of Federal Contract Compliance Programs alleging disparities in pay
       between men and women in certain job classifications and inadequate
          systems to check for such disparities. Under the Settlement Agreement,
the Company has agreed to perform a self-audited review of  
        compensation of all female exempt employees at the Company's offices
in Collegeville, Pennsylvania.                              

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       Under the Settlement Agreement, no compensation adjustments for any
time period in the past are necessary.                      

     In the litigation involving allegations that the Company violated
         federal and state antitrust laws through the use of alleged exclusive
   contracts and "disguised exclusive contracts" with managed care
    organizations and pharmacy benefit managers concerning PREMARIN,
   United States District Judge Sandra S. Beckwith has granted the
        indirect-purchasers' motion for class certification. Ferrell, et al.
       v. Wyeth-Ayerst Labs., Inc., Civ. A. No. C-1-01-634, U.S.D.C., S.D.
        Oh. Additionally, the court granted in part the Company's motion for
      partial dismissal of certain state antitrust actions by dismissing
         plaintiffs' claims brought under the antitrust laws of New Jersey and
        Louisiana, but otherwise denied the motion with respect to the other
      state laws that were the subject of the motion. In addition to the
        Ferrell action, the following two actions are also presently pending
        in the Ohio Federal District Court: a direct-purchaser class action,
       J.B.D.L. Corp., et al. v. Wyeth-Ayerst Labs., Inc., et al., Civ. A.
          No. C-1-01-704, U.S.D.C., S.D. Oh., and an action brought on behalf of
     CVS Meridian, Inc. and Rite Aid Corporation, who opted out of the
     federal direct-purchaser class action and filed a separate action
      based on their status as direct-purchasers and/or assignees of the
        claims of certain direct-purchasing wholesalers. CVS Meridian, Inc.,
          et al. v. Wyeth, Civil A. No. C-1-03-781, U.S.D.C., S.D. Oh. Moreover,
California Superior Court Judge Richard A. Kramer granted an
   indirect-purchaser's motion for class certification. Blevins v.
       Wyeth-Ayerst Labs., Inc., et al., Case No. 324380, Cal. Super. Ct.,
      San Francisco Cty. In addition to the Blevins action, there is one
        putative indirect-purchaser class action pending in California state
 court. Sullivan v. Wyeth-Ayerst Labs., Inc., et al., Case No.
GIC796997, Cal. Super. Ct., San Diego Cty.                  

        The Company has been sued by Aventis in a breach of contract case in
          the Commercial Court of Nanterre, France arising out of an October 12,
     2000 Agreement between the parties relating to the development of
hormone therapy drugs utilizing Aventis's trimegestone (TMG)
        progestin. The agreement granted Wyeth a worldwide exclusive license
         of Aventis's patents and know-how relating to TMG and Wyeth agreed to
         develop, manufacture and sell two different hormone therapy products:
        a product combining Wyeth's PREMARIN product with TMG, and a product
      combining 17 beta estradiol and TMG, referred to as "Totelle". The
         Company terminated the agreement in December 2003, and Aventis claims
   that the termination was improper. The complaint seeks monetary
  damages in the amount of $579.0 million. It also seeks certain
         injunctive relief to ensure continued marketing of Totelle, including
      compelling continued manufacture of the product and the compulsory
licensing of Totelle trademarks.                            

  The Company intends to continue to defend all of the foregoing
litigation vigorously.                                      

    In the opinion of the Company, although the outcome of any legal
          proceedings cannot be predicted with certainty, the ultimate liability
        of the Company in connection with pending litigation (other than the
     litigation involving REDUX and PONDIMIN, the potential effects of
         which are discussed in Note 7 to the consolidated condensed financial
       statements, Contingencies and Commitments) will not have a material
   adverse effect on the Company's financial position but could be
  material to the results of operations or cash flows in any one
accounting period.                                          

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Item 4.   Submission of Matters to a Vote of Security Holders                   
---------------------------------------------------         

        (a)  The matters described under item 4(c) below were submitted to a
           vote of security holders, through the solicitation of proxies
               pursuant to Section 14 under the Securities Exchange Act of 1934,
             as amended, at the Annual Meeting of Stockholders held on April
22, 2004 (the Annual Meeting).                    

(b)  Not applicable.                                        

     (c)  The following describes the matters voted upon at the Annual
             Meeting and sets forth the number of votes cast for, against or
           withheld and the number of abstentions as to each such matter
         (except as provided below, there were no broker non-votes):

(i)  Election of directors:                       

                  Nominee                           For             Withheld
                  -------                           ---             --------
                    Clifford L. Alexander, Jr.        1,099,309,328   38,804,456
                    Frank A. Bennack, Jr.             1,106,564,113   31,549,671
                    Richard L. Carrion                1,098,211,449   39,902,335
                    Robert Essner                     1,105,159,077   32,954,707
                    John D. Feerick                   1,100,646,251   37,467,533
                    Robert Langer, Sc.D.              1,113,491,173   24,622,611
                    John P. Mascotte                  1,104,602,248   33,511,536
                    Mary Lake Polan,M.D.,Ph.D.,M.P.H. 1,113,539,051   24,574,733
                    Ivan G. Seidenberg                1,106,041,894   32,071,890
                    Walter V. Shipley                 1,098,722,083   39,391,701
                    John R. Torell III                1,107,893,885   30,219,899

            (ii) Ratification of the appointment of PricewaterhouseCoopers
                 LLP as principal independent public accountants for 2004:

              For                      Against               Abstain
              ---                      -------               -------
                1,113,685,204            17,589,352            6,839,228

           (iii)Adoption of Stockholder Proposal regarding access to and
affordability of prescription drugs:    

              For                      Against               Abstain
              ---                      -------               -------
                 52,145,576               838,182,193           87,144,326

                 There were 160,641,689 broker non-votes with reference to
this item.                              

      (iv) Adoption of Stockholder Proposal on animal testing:

              For                      Against               Abstain
              ---                      -------               -------
                  21,968,950               846,615,459           108,887,686

                 There were 160,641,689 broker non-votes with reference to
this item.                              

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Item 6.   Exhibits and Reports on Form 8-K                                      
--------------------------------                            

(a)  Exhibits                                               
--------                                          

Exhibit No.   Description                         
-----------   -----------                         

          (10.1)        Executive Retirement Plan, as amended to date.

              (12)          Computation of Ratio of Earnings to Fixed Charges.

              (31.1)        Certification of disclosure as adopted pursuant to
                        Section 302 of the Sarbanes-Oxley Act of 2002.

              (31.2)        Certification of disclosure as adopted pursuant to
                        Section 302 of the Sarbanes-Oxley Act of 2002.

             (32.1)        Certification pursuant to 18 U.S.C. Section 1350,
                   as adopted pursuant to Section 906 of the
     Sarbanes-Oxley Act of 2002.

             (32.2)        Certification pursuant to 18 U.S.C. Section 1350,
                   as adopted pursuant to Section 906 of the
     Sarbanes-Oxley Act of 2002.

         (99.1)        Description of Amendment No. 1 to Amended and
                         Restated Promotion Agreement, effective July 8,
                             2003, by and among the Company, Immunex Corporation
                           and Amgen Inc. (filed as Exhibit 10.94 to Amgen's
                             Annual Report on Form 10-K (File No 1-2477) for the
                 fiscal year ended December 31, 2003) is
           incorporated herein by reference.

         (99.2)        Description of Amendment No. 2 to Amended and
                           Restated Promotion Agreement, effective April 20,
                             2004, by and among the Company, Immunex Corporation
                           and Amgen Inc. (filed as Exhibit 10.93 to Amgen's
                            Amended Registration Statement on Form S-4/A (File
                   No 333-114820) filed on June 29, 2004) is
           incorporated herein by reference.

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(b)  Reports on Form 8-K                                    
-------------------                               

               The following Current Reports on Form 8-K were filed or furnished
by the Company:                                   

         o    April 21, 2004 relating to furnishing Wyeth's earnings
                results for the 2004 first quarter (Item 12 disclosure).

              o    April 28, 2004 relating to information on Wyeth's diet drug
litigation (Item 5 disclosure).         

               o    April 29, 2004 relating to furnishing additional information
            on Wyeth's diet drug litigation (Item 9 disclosure).

             o    May 26, 2004 relating to furnishing information on Wyeth's
        diet drug litigation (Items 5 and 7 disclosure).

        o    July 21, 2004 relating to furnishing Wyeth's earnings
                 results for the 2004 second quarter (Item 12 disclosure).

              o    July 22, 2004 relating to furnishing information on Wyeth's
        diet drug litigation (Items 5 and 7 disclosure).

59

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 Signature
 ---------

        Pursuant to the requirements of the Securities Exchange Act of 1934,
         the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.               

 Wyeth
 -----
(Registrant)

By /s/ Paul J. Jones      
--------------------
 Paul J. Jones
 Vice President and Controller
(Duly Authorized Signatory
 and Chief Accounting Officer)

Date: August 9, 2004                                        

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Exhibit Index                                               
-------------                                               

Exhibit No.    Description                                  
-----------    -----------                                  

 (10.1)         Executive Retirement Plan, as amended to date.

     (12)           Computation of Ratio of Earnings to Fixed Charges.

     (31.1)         Certification of disclosure as adopted pursuant to
                Section 302 of the Sarbanes-Oxley Act of 2002.

     (31.2)         Certification of disclosure as adopted pursuant to
                Section 302 of the Sarbanes-Oxley Act of 2002.

       (32.1)         Certification pursuant to 18 U.S.C. Section 1350, as
                       adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.                  

       (32.2)         Certification pursuant to 18 U.S.C. Section 1350, as
                       adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002.                  

EX-1

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This 10-Q Filing	Date	First	Last	Other Filings

	1/1/97	56
	10/7/99	15		8-K
	10/12/00	57
	6/30/02	14		10-Q
	7/9/02	53	54
	12/31/02	25		10-K, 11-K
	1/1/03	6
	1/3/03	16	21
	4/24/03	6		DEF 14A
	5/3/03	16	21
	6/25/03	6
	6/30/03	2	42	10-Q
	7/1/03	6
	7/8/03	59
	9/1/03	6
	9/30/03	56		10-Q
	10/1/03	6		4
	10/2/03	43
	11/21/03	56		S-3/A
	12/4/03	40
	12/8/03	40
	12/31/03	3	59	10-K, 11-K
	1/1/04	6	13	3
	1/21/04	56
	3/31/04	3	50	10-Q
	4/15/04	17
	4/20/04	59		4
	4/21/04	60		8-K, 4
	4/22/04	6	58	4, DEF 14A
	4/27/04	22	52	8-K
	4/28/04	60		8-K
	4/29/04	60		8-K
	5/4/04	18	50
	5/10/04	18	50	10-Q, 4
	5/17/04	23	52
	5/26/04	60		8-K
	6/16/04	6
	6/29/04	59
For The Period Ended	6/30/04	1	50
	7/1/04	6
	7/9/04	18	50
	7/13/04	18	50
	7/14/04	15	21
	7/16/04	23	53
	7/19/04	22	51	4
	7/21/04	18	60	8-K
	7/22/04	60		8-K
	7/26/04	23	52
	7/27/04	22	52
	7/30/04	1
	8/2/04	40		POS AM
	8/4/04	18	50
	8/6/04	22	52
Filed On / Filed As Of	8/9/04	61
	8/10/04	18	50	424B3
	9/1/04	6		3
	10/1/04	6		4
	12/31/11	19	51

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Wyeth · 10-Q · For 6/30/04

Filed On 8/9/04 3:32pm ET · SEC File 1-01225 · Accession Number 5187-4-104

Quarterly Report · Form 10-QFiling Table of Contents

10-Q · Quarterly ReportDocument Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Quarterly Report · Form 10-Q
Filing Table of Contents

10-Q · Quarterly Report
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