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

The following commentary should be read in conjunction with the consolidated condensed financial statements and notes to consolidated condensed financial statements on pages 3 to 29 of this report. When reviewing the commentary below, you should keep in mind the substantial risks and uncertainties that characterize our business. In particular, we encourage you to review the risks and uncertainties described in "Item 1A. RISK FACTORS" in our 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 27, 2009. These risks and uncertainties could cause actual results to differ materially from those projected in forward-looking statements contained in this report or implied by past results and trends. Forward-looking statements are statements that attempt to forecast or anticipate future developments in our business; we encourage you to review the examples of our forward-looking statements under the heading "Cautionary Note Regarding Forward-Looking Statements" on pages 55 to 57 of this report. These statements, like all statements in this report, speak only as of their date (unless another date is indicated), and we undertake no obligation to update or revise these statements in light of future developments.

Overview

Our Business

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, biotechnology products, vaccines, non-prescription medicines and animal health products.

We have three principal operating segments: Wyeth Pharmaceuticals (Pharmaceuticals), Wyeth Consumer Healthcare (Consumer Healthcare) and Fort Dodge Animal Health (Animal Health), which we manage separately because they develop, manufacture, distribute and sell distinct products and provide services that require differing technologies and marketing strategies. These segments reflect how senior management reviews the business, makes investing and resource allocation decisions, and assesses operating performance. The percentage of worldwide net revenue and revenue generated outside the United States by operating segment for the 2009 first quarter were as follows:

                                                                    Consumer
                                            Pharmaceuticals        Healthcare        Animal Health
% of 2009 first quarter worldwide
net revenue                                       84%                 11%                  5%
% of 2009 first quarter segment net
revenue generated outside the United
States                                            52%                 47%                 65%

We also have a reportable Corporate segment primarily responsible for the audit, controller, treasury, tax and legal operations of our businesses. The Corporate segment maintains and/or incurs certain assets, liabilities, income, expense, gains and losses related to our overall management that are not allocated to the other reportable segments.

Our principal strategy for success is creation of innovative products. We strive to produce first-in-class and best-in-class therapies for significant unmet medical needs by leveraging our breadth of knowledge and our resources across three principal scientific development platforms: small molecules, biopharmaceuticals and vaccines.

On January 26, 2009, we announced that we had entered into a merger agreement with Pfizer Inc. (Pfizer) and a wholly owned subsidiary of Pfizer, pursuant to which the Pfizer subsidiary will merge with and into our Company, with our Company surviving as a wholly owned subsidiary of Pfizer. Under the terms of the merger agreement, each outstanding share of our common stock, other than shares of restricted stock (for which holders will be entitled to receive cash consideration pursuant to separate terms of the merger agreement), and shares of common stock held directly or indirectly by us or Pfizer (which will be canceled as a result of the proposed merger), and other than those shares with respect to which appraisal rights are properly exercised and not withdrawn, will be converted into the right to receive $33.00 in cash, without interest, and 0.985 of a share of common stock of Pfizer. The proposed merger has been approved by the Board of Directors of both companies and remains subject to approval by our stockholders, as well as certain additional conditions and approvals of various regulatory authorities. There are no assurances that the proposed merger with Pfizer will be consummated on the expected timetable (during the second half of 2009) or at all. The announcement of the proposed merger, whether or not consummated, may result in a loss of key personnel, may impact our relationships with third parties and may disrupt our sales and marketing, research and development, productivity initiatives or other key business activities, which may have an impact on our financial performance. The merger agreement generally requires us to operate our business in the ordinary course pending consummation of the merger but includes certain contractual restrictions on the conduct of our business that may affect our ability to execute on our business strategies and attain our financial goals. Unless stated otherwise, all forward-looking information contained in this Management's Discussion and Analysis of Financial Condition and Results of Operations does not take into account or give any effect to the impact of our proposed merger with Pfizer. See Note 11 to our consolidated condensed financial statements, "Merger Agreement with Pfizer," contained in this Quarterly Report on Form 10-Q for additional details.

2009 First Three Months Financial Highlights

• Worldwide net revenue decreased 6% as compared with the 2008 first quarter to $5,377.0 million;

• Worldwide Pharmaceuticals net revenue decreased 6% as compared with the 2008 first quarter due primarily to the unfavorable impact of foreign exchange, lower sales, excluding the impact of foreign exchange, of EFFEXOR, the PREMARIN family of products and ZOSYN and lower ENBREL alliance revenue. The decrease was partially offset by higher sales, excluding the impact of foreign exchange, of key pharmaceutical

franchises ENBREL, outside the United States and Canada, PREVNAR and Nutritional products, along with new products TYGACIL, TORISEL and PRISTIQ, as well as the PROTONIX family;

• Consumer Healthcare net revenue decreased 9% over the 2008 first quarter due primarily to the unfavorable impact of foreign exchange, lower sales, excluding the impact of foreign exchange, of CENTRUM, ALAVERT and ADVIL, and lost revenue due to the divestiture of PRIMATENE in the 2008 third quarter. The decrease was partially offset by new revenue from the acquisition of THERMACARE, which occurred in the 2008 third quarter; and

• Animal Health net revenue was comparable with the 2008 first quarter. Higher sales, excluding the impact of foreign exchange, of livestock products were offset by the unfavorable impact of foreign exchange and lower sales, excluding the impact of foreign exchange, of companion animal products.

Our Principal Products

The following table presents worldwide net revenue from our principal products
for the 2009 first quarter together with the percentage changes from the
comparable period in the prior year, both as reported and excluding the impact
of foreign exchange (FX):



                                                                                      % Increase
                                        2009 First            % Increase           (Decrease) over
                                          Quarter          (Decrease) over        2008 First Quarter
(Dollars in millions)                   Net Revenue       2008 First Quarter         Excluding FX
EFFEXOR                                $       818.8                (20)%                   (17)%
PREVNAR                                        754.7                   7%                     19%
ENBREL
Outside U.S. and Canada                        626.7                   3%                     23%
Alliance revenue - U.S. and
Canada                                         240.2                (26)%                   (26)%
Nutritionals                                   415.5                   1%                     12%
ZOSYN/TAZOCIN                                  309.9                 (9)%                    (4)%
PREMARIN family                                245.6                (11)%                   (10)%
PROTONIX family (includes our own
generic)                                       215.3                  35%                     35%
HEMOPHILIA family                              206.4                (14)%                    (3)%

• EFFEXOR (EFFEXOR and EFFEXOR XR) is our novel antidepressant for treating adult patients with major depressive disorder (MDD), generalized anxiety disorder, social anxiety disorder and panic disorder. EFFEXOR remains the number one selling antidepressant globally. Demand for EFFEXOR XR (extended release capsules) in the 2009 first quarter was negatively impacted by generic competition outside the United States and, to a lesser extent, by competition from a non-AB rated generic tablet in the United States.

• PREVNAR is our vaccine for preventing invasive pneumococcal disease in infants and young children and is now available in 93 countries worldwide and included in 35 national immunization programs (NIPs). The increase in PREVNAR net revenue during the 2009 first quarter was largely driven by the implementation of five new NIPs, the timing of government purchases and increased volume. In the future, we will continue to pursue opportunities to secure additional NIPs and launch the product in new markets.

• ENBREL is our treatment for rheumatoid arthritis, psoriasis and other conditions. We have exclusive rights to ENBREL outside the United States and Canada, and we co-promote ENBREL with Amgen Inc. (Amgen) in the United States and Canada. ENBREL continues as the leading biotechnology brand in the world and ranks fifth in worldwide sales among the top pharmaceutical products.

• Nutritionals includes our infant formula and toddler products S-26 GOLD, PROGRESS GOLD and PROMIL GOLD. We continue to expand into new markets, grow our business in the countries where we compete, particularly in key emerging markets such as China and continue to focus our business on the premium sector of the market.

• ZOSYN (TAZOCIN internationally), our broad-spectrum I.V. antibiotic, continues to be the number one selling injectable antibiotic worldwide. Demand for ZOSYN in the 2009 first quarter was negatively impacted by generic competition outside the United States.

• Our PREMARIN family of products remains the leading therapy to help women address moderate to severe menopausal symptoms.

• PROTONIX (pantoprazole sodium), is our branded proton pump inhibitor for gastroesophageal reflux disease. In response to the "at risk" launch of generic pantoprazole tablets in the United States by Teva Pharmaceuticals USA, Inc. (Teva) in December 2007 and Sun Pharmaceutical Industries Ltd. (Sun) in January 2008, we launched our own generic version of PROTONIX tablets in the 2008 first quarter. While our own generic has had some success in the marketplace, the sales of our own generic have not, and cannot, offset the substantial harm caused by the launch of infringing generics. We will continue to vigorously pursue our litigation against Teva, Sun and other infringing generics.

• Our Hemophilia franchise, which includes BENEFIX, REFACTO, REFACTO AF and XYNTHA, provides state-of-the-art products that offer patients with this lifelong bleeding disorder the potential for a near-normal life.

See "Our Challenging Business Environment" beginning on page 38 for a discussion of certain competitive and other factors that have impacted or may impact our principal products.

For more detail regarding our principal products, the preceding summary should be read in conjunction with our principal product summary in the overview section of "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our 2008 Financial Report as incorporated in our 2008 Annual Report on Form 10-K (2008 Financial Report).

Our Product Pipeline

Our continued success depends, in large part, on the discovery and development of new and innovative pharmaceutical products and additional indications for existing products.

In the fourth quarter of 2008, we implemented strategic initiatives to focus our future discovery research and development efforts on six key therapeutic areas and 27 disease areas. The therapeutic areas include: neuroscience, vaccines, inflammation, oncology, metabolism and musculoskeletal. Prior to this initiative, our discovery research and development focus stretched across 14 therapeutic areas and 54 disease areas. In hemophilia and infectious diseases, we will continue to support our product franchises on an opportunistic basis. While we are making these changes to our discovery research and development focus, we expect to continue our support of the products we have in preclinical and clinical development.

With respect to TYGACIL (tigecycline), our innovative broad-spectrum I.V. antibiotic for serious, hospital-based infections, in March 2009, the U.S. Food and Drug Administration (FDA) approved our supplemental New Drug Application (NDA) for TYGACIL for the treatment of adult patients with community-acquired bacterial pneumonia caused by susceptible strains of indicated pathogens and also approved the addition of pathogens to the complicated skin and skin structure indication and the complicated intra-abdominal infection indication. We commenced a new Phase 2 clinical trial of TYGACIL for the treatment of hospital-acquired pneumonia in the fourth quarter of 2008.

Our NDA filing for PRISTIQ, a structurally novel, once-daily serotonin-norepinephrine reuptake inhibitor (O-desmethylvenlafaxine succinate, also referred to as desvenlafaxine) for the treatment of adult patients with MDD, was approved by the FDA in February 2008. FDA approval was subject to several post-marketing commitments. We began shipping PRISTIQ in April 2008 and conducted our full U.S. launch of the product in May 2008. In October 2008, as part of our global regulatory strategy and in consultation with the Committee for Medicinal Products for Human Use (CHMP), we withdrew our central European Marketing Authorization Application (MAA) for desvenlafaxine for the treatment of MDD in adults and have chosen not to pursue it at this time. This decision was based on preliminary feedback from representatives of the CHMP that additional efficacy data for desvenlafaxine would be required for CHMP to recommend a positive opinion. PRISTIQ has been approved for the treatment of MDD in adults in 13 countries, including the United States and Canada, and applications currently are pending in 27 additional markets.

With respect to our NDA filing with the FDA for PRISTIQ for the non-hormonal treatment of vasomotor symptoms associated with menopause, we received an approvable letter from the FDA in July 2007. In its letter, the FDA indicated that before the application could be approved, among other things, it would be necessary for us to provide additional data regarding the potential for serious adverse cardiovascular and hepatic effects associated with the use of PRISTIQ in this indication. The FDA requested that these data come from a randomized, placebo-controlled clinical trial of a duration of one year or more conducted in postmenopausal women. The requested clinical trial currently is under way and is expected to be completed in the first half of 2010. In the European Union (EU), we believe additional data will be necessary to address questions raised by the CHMP regarding the risk/benefit profile of desvenlafaxine for the treatment of vasomotor symptoms, which could include data from the new study requested by the FDA. As a result, in March 2008, we withdrew our MAA in the EU for this indication. Mexico and Thailand recently granted approvals for PRISTIQ to treat menopausal symptoms.

We and our collaboration partner, Progenics Pharmaceuticals, Inc., are working to develop subcutaneous and/or oral formulations of RELISTOR for the treatment of opioid-induced constipation in settings outside of the palliative care setting (where we received approval from the FDA and the European Commission in 2008), such as for chronic pain.

In February 2009, we received approval in the EU for REFACTO AF (the EU trade name for XYNTHA, which we launched in the United States in 2008), our recombinant factor VIII product for patients with hemophilia A for both the control and prevention of bleeding episodes and surgical prophylaxis. We anticipate launch in mid-2009.

Regarding VIVIANT (bazedoxifene), our selective estrogen receptor modulator for postmenopausal osteoporosis, the FDA has advised us that it expects to convene an advisory committee to review our pending NDAs for both the treatment and prevention indications. We have received approvable letters for each of these NDAs, in which, among other things, the FDA requested further analyses and discussion concerning the incidence of stroke and venous thrombotic events, identified certain issues concerning data collection and reporting, and requested additional source documents. We expect that the FDA-requested advisory committee meeting will be scheduled following submission of our complete response to the approvable letters, which we plan to file in 2009. In April 2009, we received approval in the EU for CONBRIZA (the EU trade name for VIVIANT) for the treatment of postmenopausal osteoporosis in women at increased risk of fracture. We expect to launch CONBRIZA in the EU no earlier than 2010.

With respect to APRELA (bazedoxifene/conjugated estrogens), our tissue selective estrogen complex under development for menopausal symptoms and osteoporosis, we met with the FDA in early 2008 to review the results from our Phase 3 clinical trials and to discuss our planned NDA filing. While our discussions with the FDA are continuing, our plans currently contemplate an initial NDA filing for only the lower of the two principal doses studied in those trials. We must successfully complete additional work before filing an NDA, including finalizing our proposed commercial formulation and linking it to the formulations used in the clinical trials, and we now expect to file an initial NDA no earlier than the first half of 2010. Depending on the outcome of this work and future interactions with the FDA, it is possible that additional clinical data may be necessary to support approval.

Our Phase 3 clinical programs for PREVNAR 13 (Pneumococcal 13-valent Conjugate Vaccine (Diphtheria CRM197 Protein)) remain ongoing. In December 2008, we submitted an MAA to the European Medicines Agency for approval for PREVNAR 13 in infants and children from two months to five years of age. In March 2009, we completed our submission of a Biologic License Application to the FDA for PREVNAR 13 for the prevention of pneumococcal disease in infants and toddlers, for which the FDA has granted priority review in May 2009. Based on this designation, we expect a regulatory decision within six months. We initiated other global pediatric filings in late 2008 and, to date, have submitted regulatory applications for PREVNAR 13 in more than 40 countries worldwide. Further pediatric filings will occur throughout 2009. PREVNAR 13 is also being studied in Phase 3 global clinical trials in adults, with regulatory filings expected in 2010.

In December 2007, we and our collaboration partner, Elan Corporation, plc (Elan), initiated a Phase 3 clinical program for our immunotherapeutic product candidate, bapineuzumab (AAB-001), for the treatment of patients with mild to moderate Alzheimer's disease. Elan is conducting the Phase 3 clinical program in North America while we are conducting the program in other countries worldwide. Based on an interim analysis of data from the principal Phase 2 trial, in early 2008, we initiated the submission of clinical trial applications to support initiating the Phase 3 program outside North America prior to the availability of the final Phase 2 data. In some countries, regulatory authorities asked to review the full Phase 2 data, the Phase 3 protocols and amendments, and/or the Phase 3 safety experience to date before approving the clinical trial applications or permitting continued enrollment and dosing. These actions resulted in slower enrollment during 2008 than originally planned. The majority of these regulatory authority reviews now have occurred, and enrollment in the clinical studies in many of these countries is continuing, while in others, we remain in discussions with the regulators. In April 2009, we and Elan discontinued the highest of three dosing regimens in the two ongoing Phase 3 studies of bapineuzumab in patients with mild to moderate Alzheimer's disease who do not carry the Apolipoprotein E4 (ApoE4) allele (non-carriers). ApoE4 is a known genetic risk factor for development of Alzheimer's disease. These studies are continuing with the two lower dosing regimes, and this decision has no impact on the other two ongoing Phase 3 studies, which are testing a single dose of bapineuzumab in patients who carry the ApoE4 allele (carriers). The decision to discontinue the highest dosing regimen in the non-carrier studies was made in concurrence with the studies' independent Safety Monitoring Committee following its review of vasogenic edema in the ongoing Phase 3 clinical program.

We currently have two Phase 3 clinical programs in oncology under way: neratinib (HKI-272) under development for the treatment of women with advanced HER-2-positive breast cancer and bosutinib (SKI-606), a targeted kinase inhibitor under development for the treatment of chronic myelogenous leukemia.

We continue to pursue in-licensing opportunities and strategic collaborations to supplement our internal research and development efforts. We face heavy competition from our peers in securing these relationships but believe that the excellence of our research and development and commercial organizations and the breadth of our expertise across traditional pharmaceuticals, biotechnology and vaccines position us well.

Certain Product Liability Litigation

Diet Drug Litigation

Our diet drug litigation is described in greater detail in Note 15 to our consolidated financial statements, "Contingencies and Commitments," contained in our 2008 Financial Report and in Note 9 to our consolidated condensed financial statements, "Contingencies and Commitments," contained in this Quarterly Report on Form 10-Q. The $1,038.2 million reserve balance at March 31, 2009 represents our best estimate, within a range of outcomes, of the aggregate amount required to cover diet drug litigation costs, including payments in connection with the nationwide settlement, claims asserted by opt outs from the nationwide

settlement, primary pulmonary hypertension claims and our legal fees related to the diet drug litigation. It is possible that additional reserves may be required in the future, although we do not believe that the amount of any such additional reserves is likely to be material.

Hormone Therapy Litigation

During 2006, we began the first of a number of trials in our hormone therapy litigation, which is described in greater detail in Note 15 to our consolidated financial statements, "Contingencies and Commitments," contained in our 2008 Financial Report and in Note 9 to our consolidated condensed financial statements, "Contingencies and Commitments," contained in this Quarterly Report on Form 10-Q. As of March 31, 2009, we were defending approximately 8,400 actions brought on behalf of approximately 10,100 women in various federal and state courts throughout the United States for personal injuries, including primarily claims for breast cancer, as well as claims for, among other conditions, stroke, ovarian cancer and heart disease, allegedly resulting from their use of PREMARIN or PREMPRO. We also face putative class action lawsuits from users of PREMARIN or PREMPRO seeking medical monitoring and purchase price refunds, as well as other damages. Although most of these putative class actions have been dismissed or withdrawn, a hearing for class certification in a West Virginia statewide refund class action that began in 2008 has been adjourned to a date not yet set in 2009.

Of the 30 hormone therapy cases alleging breast cancer that have been resolved after being set for trial, 23 now have been resolved in our favor (by voluntary dismissal by the plaintiffs (14), summary judgment (5), defense verdict (3) or judgment for us notwithstanding the verdict (1)), several of which are being appealed by the plaintiffs. Of the remaining seven cases: four such cases have been settled, one resulted in a plaintiffs' verdict that was vacated by the court and a new trial ordered (which plaintiffs have appealed), and two resulted in plaintiffs' verdicts that we are appealing. One case, Brockert, that had been resolved in our favor by summary judgment was affirmed in part and reversed in . . .