As expected, generic competition and challenging market conditions reflected in lower second quarter revenues. Progress made on execution of long-term priorities, with the on-market portfolio and the pipeline strengthened through recent business development initiatives. Financial targets for full year unchanged.
Revenue for the second quarter was $6,660 million, down 18 percent at constant exchange rates (CER).
- Loss of exclusivity on several key brands accounted for 15 percentage points of the revenue decline. Resilient performance for Crestor. Strong growth continued for ONGLYZATM, Iressa and Faslodex.
- As expected, further limitations in the supply chain at our plant in Sweden continued into the second quarter; the estimated impact on second quarter revenue was around 2 percent. The Company estimates the impact for the full year will be around 1 percent of revenue.
- Emerging Markets revenue increased by 1 percent at CER. Supply chain issues impacted Emerging Markets revenue; adjusted for this, revenue growth would have been around 8 percent.
- Core EPS was $1.53 in the second quarter, a 6 percent decline at CER.
- Core EPS benefited by $240 million ($0.19 per share) due to the tax settlement of a cross border transfer pricing issue. The effective tax rate for the full year is now estimated to be around 20 percent.
- Reported EPS in the second quarter was down 11 percent at CER to $1.27.
- Diabetes alliance will expand through Bristol-Myers Squibb's acquisition of Amylin Pharmaceuticals.
- The Board has recommended a first interim dividend of $0.90. Net share repurchases were $1.6 billion in the first half; target for full year remains $4.5 billion, subject to market conditions and business needs.
- Core EPS target range for the full year maintained at $5.85 to $6.15.
