As you will recall, we created the Established Products unit to recapture value for products that have lost or will soon lose patent protection for marketing exclusivity. And we are pleased that in fourth-quarter ''09 legacy Pfizer contributed plus 1% of operational growth year-over-year to Established Products growth, positive growth for the first time.
We do expect that the financial results for this unit will continue to vary quarterly, depending on products that have lost exclusivity and where they have lost exclusivity, the existence of generic alternatives and other factors.
Emerging Markets revenues increased 25% year-over-year, including a 1% favorable impact of foreign exchange. Operational growth of 24% was due to the addition of Enbrel and Prevnar, legacy Wyeth products and double-digit growth in priority markets such as Brazil, Russia, India and China.
In fourth-quarter ''09 legacy Pfizer contributed 10% of operational growth to Emerging Markets results. This is the first quarter that legacy Pfizer has contributed double-digit operational growth to Emerging Markets results since the launch of this unit.
Oncology revenues increased 11% year-over-year, including a 5% favorable impact of foreign exchange. Operational growth of 6% was due to the addition of Wyeth''s oncology portfolio, the continued solid performance of Sutent, despite increasing market challenges, which were partially offset by the continued negative impact of Camptosar''s LOE in most European markets in July of 2009.
Fourth-quarter ''09 diversified revenues increased 83% year-over-year, which included a favorable impact of $45 million or 5% from foreign exchange. Operational growth of 78% was due to an 11% of operational increase in Animal Health revenues, due to the addition of Wyeth''s Fort Dodge products and an increase in legacy Pfizer''s Animal Health revenues and the addition of Wyeth Consumer Healthcare, which includes Centrum, Advil and Robitussin, among other products in Wyeth''s Nutrition products. And an increase in Capsugel revenues due to strength in all regions and across all major product groups.
In January of ''09, Pfizer implemented a new cost reduction program expected to achieve gross reductions of approximately $3 billion at ''08 average exchange rates, compared with ''08 adjusted total costs. As we previously said, we anticipate a $2 billion net decrease in adjusted total cost, as we expect to reinvest about $1 billion of those reductions in the business. At the same time, we also said we expect to generate $4 billion in synergies from the Wyeth acquisition. We now anticipate generating net synergies of about $2 billion to $3 billion after reinvestment.
We are now combining the projected cost reductions from these two initiatives and expect to generate in the aggregate gross cost reductions of about $7 billion and net cost reductions of about $4 billion to $5 billion by the end of 2012 at 2008 average exchange rates versus Pfizer''s and Wyeth''s combined ''08 pro forma adjusted total cost.
We expect approximately $2 billion to $3 billion of these reductions to be reinvested in potential growth opportunities for 2012 and beyond, such as Emerging Markets, Established Products, in-line product support and expected new product launches. Our cost reduction initiatives continue to span essentially all divisions, functions, markets and sites across Pfizer. For example, broad categories of activity include manufacturing and research site exits, targeted workforce reductions and outsourcing.
We continue to expect about 50% of the projected reductions to come from SI&A and the remainder from R&D and manufacturing. In addition, we continue to expect the Wyeth acquisition to be slightly accretive to earnings in 2011.
Consistent with our statements during the last earnings call, during the fourth quarter we reinvested a portion of the year-to-date net cost reductions, about $750 million, in the following areas. Business development transactions in Established Products, resulting in license agreements this quarter with Protalix, Strides and Clarus.
Incremental promotional efforts in the U.S, primarily around Primary Care products, including Lipitor, Lyrica and Chantix, whose fourth-quarter ''09 growth rates improved sequentially and promotional efforts in Emerging Markets, which contributed to the 10% overall legacy Pfizer Emerging Markets year-over-year growth and strong double-digit growth in the fourth quarter in Brazil, Russia, India and China.
Net of these investments, we reduced Pfizer''s standalone costs by $200 million on a constant currency basis for full-year ''09 versus ''08. We believe we can achieve our cost reduction targets as we begin to realize the benefits of some of the synergy decisions we have made, including determining headquarters locations, rationalizing our R&D portfolio and reducing our R&D real estate footprint by about 35%.
In addition, we will continue making decisions quickly, including refining the combined company''s manufacturing network strategy within the next few months. We are confident in our ability to achieve the previously mentioned $4 billion to $5 billion projected cost reductions, while continuing to reinvest in the business.
Now we will move on to 2010 financial guidance, which is based on late January exchange rates and does not assume the completion of any new business development transactions not completed as of December 31, of ''09. The guidance also excludes the potential impact of healthcare reform in the U.S.
In 2010, we currently expect for the combined company reported revenues in the range of $67 billion to $69 billion, cost of sales as a percentage of revenues of 19% to 20%, adjusted SI&A in the range of $19 billion to $20 billion, adjusted R&D expenses in the range of $9.1 billion to $9.6 billion, adjusted other deductions in the range of $1.2 billion to $1.4 billion, effective tax rate on adjusted income of about 30%, reported diluted EPS in the range of $0.95 to $1.10 and adjusted diluted EPS in the range of $2.10 to $2.20.
2010 revenue and EPS guidance was negatively impacted by the recent unfavorable changes in foreign exchange. For example, based on exchange rates in late January, the strengthening of the U.S. dollar has decreased our adjusted diluted EPS guidance by about $0.06.
Finally, it is important to note that in 2010 Pfizer''s U.S. Biopharmaceutical organization is evolving its U.S. distribution model to a fee-for-service approach in the U.S. Plans for this change were in place prior to the Wyeth acquisition and Wyeth already has a fee-for-service arrangement in the U.S. This change should not have a significant impact on 2010 results. It should, however, have a slight one-time impact on seasonal sales patterns in the first and second quarter of 2010.
We expect first-quarter sales of legacy Pfizer products to moderately decrease year-over-year, which we then expect will be offset by a moderate year-over-year increase in second-quarter sales.
We are updating and expanding our 2012 financial targets. We have added targets for reported diluted EPS, adjusted R&D expenses, adjusted other deductions and the effective tax rate on adjusted income. We now expect 2012 reported revenues to be in the range of $66 billion to $68.5 billion, which reflects the divestiture of Animal Health assets required by the regulatory authorities, a revenue shift to the newly formed HIV Company, ViiV Healthcare, resulting from our joint venture with GSK and Wyeth''s return of its Relistor rights to the licensor. All combined, these items decreased the previous target by about $1.5 billion.
We also expect in 2012, adjusted R&D expenses to be in the range of $8 billion to $8.5 billion, adjusted other deductions to be in the range of $1 billion to $1.2 billion, adjusted operating margins to be in the previously expected range of high 30s to low 40s percent, the effective tax rate on adjusted income to be about 30%, reported diluted EPS to be in the range of $1.58 to $1.73, adjusted diluted EPS to be in the range of $2.25 to $2.35, which is based on approximately 8.1 billion shares currently outstanding and then operating cash flow of $19 billion or more.
It is important to note that 2012 targets assume the current rate of inflation. Any meaningful change in this rate could cause these targets to change. Both our 2010 guidance and 2012 targets reflect our confidence in the business and balance the achievement of our expected cost reductions with the anticipated increased investment to drive longer-term top and bottom-line performance. In addition, in 2012 our targets assume a modest level of planned business development activities. I want to emphasize hat these longer-term targets are subject to greater variability and uncertainty due to macroeconomic factors.
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