Question-and-Answer

Operator

Thank you. If you would like to ask a question, please press star one now.

Our first question comes from Catherine Arnold, Credit Suisse.

Catherine Arnold – Credit Suisse

Thanks a lot and good morning. I wanted to ask you a couple of questions. First of all, on the 2010 guidance, we would obviously like to trust that the reinvestment that you are making in the products is prudent and beneficial in the long term strategic outlook for the company. But I think we need a little bit more color so that we can have that confidence.
So if you could talk about, why the SI&A expenses are presumably much higher than the street expected. And obviously you are not inside of our models, but you have some priorities that perhaps you could elucidate for us.

And then if you could comment on the 2012 revenue difference and where that primarily came from. And my last question is that with all the back-and-forth about the ratio of pharma acquisition, I wondered if you could remind us what you would see as the pros and cons of buying a generic business of that sort of, of store. Thanks.

Jeffrey B. Kindler

Okay. Catherine, good morning. It is Jeff. Thank you for the questions. Let me make a general statement about your first question, which is investments in 2010 and then I'm going to ask Frank and Ian to elaborate. We have had the benefit now since the closing of the Wyeth transaction to really dig deep into the opportunities that the two companies provide and to really consider where there is opportunities to invest in growth. We have now with our business model a very, I think, very rigorous process.

And as we've talked about in the past, we really apply very different hurdle rates to different businesses based on the various risks that they present, which vary. And it is a pretty disciplined process. And we have looked at where there are opportunities in these different businesses based on their growth opportunities, based on what they see in their different markets. And we also, as I mentioned in my comments and Frank and Ian can elaborate on this, want to do that in a flexible way so that we can adjust our costs and investment as needed.

And so what we are talking about for 2010 reflects a very thorough review of where those investments can be made in both the short and the long-term to grow the business. So that is the approach we took. I will let Frank and Ian give you more specifics but I just wanted to give you that overview of how we thought about it.

And I think, actually, that we are very excited about a lot of those opportunities. But I want to emphasize that it is a balance between continuing to reduce costs, both on an absolute basis, but also create a flexible cost structure so that we can flex it as needed and as business requirements demand. But also kind of a real bottoms up business leader focused, market by market, customer set by customers set opportunities for growth that we approach in a pretty disciplined way. And that is how we come about these investment opportunities.

So let me ask Frank and Ian to take your questions, both about the 2010 issue and the 2012 revenues. And then I will ask Ian, obviously we are not going to comment on any particular potential transactions but Ian can elaborate generally about our thinking on established business opportunities. So, Frank.

Frank A. D’Amelio

Yes. Let me he hit the 2012 revenue number first, then I will go to the 2010 reinvestment. On 2012 revenue let me bridge it this way. Back in January of last year we gave a target of approximately $70 billion, which was the sum of the two company's revenue numbers in 2008, to add to standalone Pfizer and standalone Wyeth. So a couple of things have happened.

One, the first bridge is from $70 billion to $68.5 billion, which is the top end of our new target range. Three things, the planned Animal Health divestitures. The second item is the HIV joint venture, ViiV Healthcare. And then the third item is basically the return of Relistor rights to the licensor. Those three items were not in the approximately $70 billion target that we had issued, so that takes you from roughly $70 billion to $68.5 billion.

Then in terms of the new range, the $66 billion to $68.5 billion, we have had a year now since we issued that target back in January. We have had a year with the new business unit model in place and getting the benefits of that model. We have integrated Wyeth. We have had four months or so now post integration with Wyeth.

And when we factor in all the data, all the bottoms up work that we've done, we are now updating to target the $66 billion to $68.5 billion. And we have confidence in our ability to achieve that number. So that is the 2012 revenue item. On 2010 and on investments, I will touch on this. Ian, I will let you make some comments and we may even want some product comment on this, not just limiting it to SI&A, although Catherine talked about SI&A.

At a high level, at a general ledger level and I will let Ian get into some of the detail, it is the opportunity growth areas that we have been talking about where we continue to see opportunity. So it is Emerging Markets, where we continue to invest, I will call it additional marketing investment, make additional marketing investment in the focus countries. Adding field force, promotional tools, sales tools. We saw some of the benefits of that this past quarter with double-digit growth in legacy Pfizer Emerging Markets and very strong double-digit growth in our priority countries -- in many of our priority countries.

Continuing to invest in Established Markets, once again, sales feet on the street on SI&A and also continuing to just work through other growth opportunity areas that we see. Ian?