================================================================================
                                  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
September 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
October 29, 2004:

                                                          Number of
                    Class                             Shares Outstanding
      Common Stock, $0.33-1/3 par value                 1,334,195,705

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


<PAGE>

                                      WYETH

                                      INDEX

                                                                       Page No.
                                                                       --------

Part I   -  Financial Information (Unaudited)                               2

         Item 1. Consolidated Condensed Financial Statements:

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

                 Consolidated Condensed Statements of Operations -
                   Three and Nine Months Ended September 30, 2004
                   and 2003                                                 4

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

                 Consolidated Condensed Statements of Cash Flows -
                   Nine Months Ended September 30, 2004 and 2003            6

                 Notes to Consolidated Condensed Financial Statements     7-27

         Item 2. Management's Discussion and Analysis of
                   Financial Condition and Results of Operations         28-51

         Item 3. Quantitative and Qualitative Disclosures about
                   Market Risk                                             52

         Item 4. Controls and Procedures                                   52

Part II  -  Other Information                                              53

         Item 1. Legal Proceedings                                       53-59

         Item 6. Exhibits and Reports on Form 8-K                          60

Signature                                                                  61

Exhibit Index                                                             EX-1



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


                                       1
<PAGE>

                         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 September 30, 2004 and December 31, 2003, the
results of its operations for the three and nine months ended September 30, 2004
and 2003, and changes in stockholders' equity and cash flows for the nine months
ended September 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 Reports on Form 10-Q for the quarters ended March
31, 2004 and June 30, 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.


                                       2
<PAGE>

<TABLE>
                                              WYETH
                              CONSOLIDATED CONDENSED BALANCE SHEETS
                             (In Thousands Except Per Share Amounts)
                                           (Unaudited)
<CAPTION>
                                                                   September 30,    December 31,
                                                                       2004             2003
                                                                   -------------    ------------
ASSETS
<S>                                                                <C>              <C>
Cash and cash equivalents                                             $4,501,937      $6,069,794
Marketable securities                                                  1,604,109       1,110,297
Accounts receivable less allowances                                    2,841,429       2,529,613
Inventories:
     Finished goods                                                      739,187         821,637
     Work in progress                                                  1,312,081       1,141,916
     Materials and supplies                                              333,980         448,631
                                                                   -------------    ------------
                                                                       2,385,248       2,412,184
Other current assets including deferred taxes                          2,721,901       2,840,354
                                                                   -------------    ------------
     Total Current Assets                                             14,054,624      14,962,242

Property, plant and equipment                                         12,344,109      11,686,252
     Less accumulated depreciation                                     3,373,320       3,025,201
                                                                   -------------    ------------
                                                                       8,970,789       8,661,051
Goodwill                                                               3,821,152       3,817,993
Other intangibles, net of accumulated amortization
  (September 30, 2004-$156,818 and December 31, 2003-$128,137)           225,201         133,134
Other assets including deferred taxes                                  3,526,946       3,457,502
                                                                   -------------    ------------
     Total Assets                                                    $30,598,712     $31,031,922
                                                                   =============    ============

LIABILITIES
Loans payable                                                           $336,205      $1,512,845
Trade accounts payable                                                   815,211       1,010,749
Dividends payable                                                        306,840             -
Accrued expenses                                                       5,236,305       5,461,835
Accrued federal and foreign taxes                                        492,458         444,081
                                                                   -------------    ------------
     Total Current Liabilities                                         7,187,019       8,429,510

Long-term debt                                                         7,812,764       8,076,429
Accrued postretirement benefit obligations other than pensions         1,029,339       1,007,540
Other noncurrent liabilities                                           3,452,839       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                              444,685         444,151
Additional paid-in capital                                             4,782,016       4,764,390
Retained earnings                                                      5,883,159       4,112,285
Accumulated other comprehensive income (loss)                              6,850         (26,487)
                                                                   -------------    ------------
     Total Stockholders' Equity                                       11,116,751       9,294,381
                                                                   -------------    ------------
     Total Liabilities and Stockholders' Equity                      $30,598,712     $31,031,922
                                                                   =============    ============

The accompanying notes are an integral part of these consolidated condensed financial statements.
</TABLE>

                                       3
<PAGE>

<TABLE>
                                                     WYETH
                                CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
                                    (In Thousands Except Per Share Amounts)
                                                  (Unaudited)
<CAPTION>
                                                           Three Months                   Nine Months
                                                        Ended September 30,           Ended September 30,
                                                      ------------------------     --------------------------
                                                         2004          2003           2004           2003
                                                      ----------    ----------     -----------    -----------
<S>                                                   <C>           <C>            <C>            <C>
Net revenue                                           $4,471,836    $4,081,609     $12,709,830    $11,517,222
                                                      ----------    ----------     -----------    -----------
Cost of goods sold                                     1,162,664     1,126,356       3,390,613      3,074,555
Selling, general and administrative expenses           1,419,842     1,313,870       4,201,546      3,967,362
Research and development expenses                        525,855       502,758       1,815,412      1,517,123
Interest expense, net                                     26,585        24,304          85,413         77,182
Other expense (income), net                                9,941        (5,732)       (117,072)      (269,299)
Diet drug litigation charge                                  -       2,000,000             -        2,000,000
Gain on sale of Amgen common stock                           -             -               -         (860,554)
                                                      ----------    ----------     -----------       --------

Income (loss) before federal and foreign taxes         1,326,949      (879,947)      3,333,918      2,010,853
Provision (benefit) for federal and foreign taxes        (94,343)     (453,589)        335,578        294,924
                                                      ----------    ----------     -----------    -----------


Net income (loss)                                     $1,421,292     $(426,358)     $2,998,340     $1,715,929
                                                      ==========    ==========     ===========    ===========



Basic earnings (loss) per share                            $1.07        $(0.32)          $2.25          $1.29
                                                      ==========    ==========     ===========    ===========


Diluted earnings (loss) per share                          $1.06        $(0.32)          $2.24          $1.29
                                                      ==========    ==========     ===========    ===========


Dividends paid per share of common stock                   $0.23         $0.23           $0.69          $0.69
                                                      ==========    ==========     ===========    ===========


Dividends declared per share of common stock               $0.23         $0.23           $0.92          $0.92
                                                      ==========    ==========     ===========    ===========

The accompanying notes are an integral part of these consolidated condensed financial statements.
</TABLE>


                                       4
<PAGE>

<TABLE>
                                                               WYETH
                                CONSOLIDATED CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                              (In Thousands Except Per Share Amounts)
                                                            (Unaudited)
<CAPTION>
Nine Months Ended September 30, 2004:
                                                     $2.00                                            Accumulated
                                                  Convertible              Additional                    Other           Total
                                                   Preferred     Common     Paid-in      Retained    Comprehensive   Stockholders'
                                                     Stock       Stock      Capital      Earnings    Income (Loss)       Equity
                                                  -----------   --------   ----------   ----------   -------------   -------------
<S>                                               <C>           <C>        <C>          <C>          <C>             <C>
Balance at January 1, 2004                                $42   $444,151   $4,764,390   $4,112,285        $(26,487)     $9,294,381

Net income                                                                               2,998,340                       2,998,340
Currency translation adjustments                                                                            12,333          12,333
Unrealized gains on derivative contracts, net                                                               31,370          31,370
Unrealized losses on marketable securities, net                                                            (10,366)        (10,366)
                                                                                                                     -------------
     Comprehensive income, net of tax                                                                                    3,031,677
                                                                                                                     -------------

Cash dividends declared (1)                                                             (1,226,939)                     (1,226,939)
Common stock issued for stock options                                436       32,992                                       33,428
Other exchanges                                            (1)        98      (15,366)        (527)                        (15,796)
                                                  -----------   --------   ----------   ----------   -------------   -------------
Balance at September 30, 2004                             $41   $444,685   $4,782,016   $5,883,159          $6,850     $11,116,751
                                                  ===========   ========   ==========   ==========   =============   =============


Nine Months Ended September 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                                                                               1,715,929                       1,715,929
Currency translation adjustments                                                                           413,008         413,008
Unrealized gains on derivative contracts, net                                                                   24              24
Unrealized gains on marketable securities, net                                                               2,413           2,413
Realized gain on sale of Amgen stock
  reclassified to net income                                                                              (515,114)       (515,114)
                                                                                                                     -------------
     Comprehensive income, net of tax                                                                                    1,616,260
                                                                                                                     -------------

Cash dividends declared (2)                                                             (1,223,091)                     (1,223,091)
Common stock issued for stock options                              1,807      104,380                                      106,187
Other exchanges                                            (3)        61       20,177       (2,191)                         18,044
                                                  -----------   --------   ----------   ----------   -------------   -------------
Balance at September 30, 2003                             $43   $443,887   $4,707,330   $3,777,292       $(255,240)     $8,673,312
                                                  ===========   ========   ==========   ==========   =============   =============

(1) Included in cash dividends declared were the following dividends payable at September 30, 2004:
    - Common stock cash dividend of $0.23 per share ($306,832 in the aggregate) declared on September 30, 2004 and payable
      on December 1, 2004; and
    - Preferred stock cash dividends of $0.50 per share ($8 in the aggregate)declared on June 16, 2004 and paid on October 1, 2004.

(2) Included in cash dividends declared were the following dividends payable at September 30, 2003:
    - Common stock cash dividend of $0.23 per share ($306,281 in the aggregate) declared on September 25, 2003 and paid
      on December 1, 2003; and
    - Preferred stock cash dividends of $0.50 per share ($9 in the aggregate) declared on June 25, 2003 and paid on October 1, 2003.

The accompanying notes are an integral part of these consolidated condensed financial statements.
</TABLE>


                                       5
<PAGE>

<TABLE>
                                               WYETH
                          CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                          (In Thousands)
                                            (Unaudited)
<CAPTION>
                                                                             Nine Months
                                                                         Ended September 30,
                                                                    -----------------------------
                                                                       2004               2003
                                                                    ----------         ----------
Operating Activities
--------------------
<S>                                                                 <C>                <C>
Net income                                                          $2,998,340         $1,715,929
Adjustments to reconcile net income to net cash
  provided by operating activities:
   Diet drug litigation charge                                             -            2,000,000
   Gain on sale of Amgen shares                                            -             (860,554)
   Gains on sales of assets                                           (185,048)          (289,561)
   Depreciation and amortization                                       447,564            398,064
   Change in deferred income taxes                                     167,979           (727,809)
   Income tax adjustment                                              (407,600)               -
   Diet drug litigation payments                                      (507,351)          (336,059)
   Security fund deposit                                                   -             (535,200)
   Changes in working capital, net                                    (631,402)           451,425
   Other items, net                                                    (24,794)           (24,398)
                                                                    ----------         ----------
Net cash provided by operating activities                            1,857,688          1,791,837
                                                                    ----------         ----------

Investing Activities
--------------------
Purchases of property, plant and equipment                            (869,600)        (1,245,673)
Proceeds from sale of Amgen common stock                                   -            1,579,917
Proceeds from sales of assets                                          348,089            332,956
Proceeds from sales and maturities of marketable securities          1,024,129            775,674
Purchases of marketable securities                                  (1,533,157)        (1,059,125)
                                                                    ----------         ----------
Net cash provided by (used for) investing activities                (1,030,539)           383,749
                                                                    ----------         ----------

Financing Activities
--------------------
Net repayments of commercial paper                                         -           (2,996,030)
Proceeds from issuance of long-term debt                                   -            1,800,000
Repayments of long-term debt                                        (1,500,000)               -
Other borrowing transactions, net                                       (4,899)           (25,159)
Dividends paid                                                        (920,099)          (916,801)
Exercises of stock options                                              33,428            106,187
                                                                    ----------         ----------
Net cash used for financing activities                              (2,391,570)        (2,031,803)
                                                                    ----------         ----------
Effect of exchange rate changes on cash and cash equivalents            (3,436)            19,894
                                                                    ----------         ----------
Increase (decrease) in cash and cash equivalents                    (1,567,857)           163,677
Cash and cash equivalents, beginning of period                       6,069,794          2,943,604
                                                                    ----------         ----------
Cash and cash equivalents, end of period                            $4,501,937         $3,107,281
                                                                    ==========         ==========

Supplemental Information
------------------------
Interest payments                                                     $256,571           $275,940
Income tax payments, net of refunds                                    552,834            395,371

The accompanying notes are an integral part of these consolidated condensed financial statements.
</TABLE>


                                       6
<PAGE>

                                      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 (loss) and
          earnings (loss) 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:

<TABLE>
<CAPTION>
                                                              Three Months                  Nine Months
                                                           Ended September 30,          Ended September 30,
                                                         -----------------------      ------------------------
          (In thousands except per share amounts)           2004         2003            2004          2003
          ------------------------------------------     ----------    ---------      ----------    ----------
<S>                                                      <C>           <C>            <C>           <C>
          Net income (loss), as reported                 $1,421,292    $(426,358)     $2,998,340    $1,715,929
          Add: Stock-based employee compensation
            expense included in reported net income,
            net of tax                                        5,237        3,725          11,605        11,804
          Deduct: Total stock-based employee
            compensation expense determined
            under fair value-based method for all
            awards, net of tax                              (73,787)     (81,690)       (235,115)     (245,322)
                                                         ----------    ---------      ----------    ----------

          Adjusted net income (loss)                     $1,352,742    $(504,323)     $2,774,830    $1,482,411
                                                         ==========    =========      ==========    ==========

          Earnings (loss) per share:
            Basic - as reported                               $1.07       $(0.32)          $2.25         $1.29
                                                         ==========    =========      ==========    ==========
            Basic - adjusted                                  $1.01       $(0.38)          $2.08         $1.12
                                                         ==========    =========      ==========    ==========

            Diluted - as reported                             $1.06       $(0.32)          $2.24         $1.29
                                                         ==========    =========      ==========    ==========
            Diluted - adjusted                                $1.01       $(0.38)          $2.07         $1.11
                                                         ==========    =========      ==========    ==========
</TABLE>

                                       7
<PAGE>

                                      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 nine months ended
          September 30, 2004 are as follows:

<TABLE>
<CAPTION>
                                                                    Consumer       Animal
          (In thousands)                       Pharmaceuticals     Healthcare      Health        Total
          --------------------------------     ---------------     ----------     --------     ----------
<S>                                            <C>                 <C>            <C>          <C>
          Balance at December 31, 2003           $2,691,772         $592,526      $533,695     $3,817,993
          Currency translation adjustments            3,190              (63)           32          3,159
                                                 ----------         --------      --------     ----------
          Balance at September 30, 2004          $2,694,962         $592,463      $533,727     $3,821,152
                                                  ==========         ========      ========     ==========
</TABLE>


          The Company's other intangibles consist primarily of license
          agreements and acquired patents, which are being amortized over their
          estimated useful lives ranging from three to 10 years. Amortization of
          intangibles is predominantly recorded within Selling, general and
          administrative expenses in the Consolidated Condensed Statements of
          Operations and was $7.3 million and $20.4 million for the 2004 third
          quarter and first nine months, respectively. During the 2004 third
          quarter, the Company acquired certain licenses and patents related to
          a product currently marketed by the Company. The cost of $104.6
          million has been recorded within Other intangibles and will be
          amortized over the respective lives of the license agreements and
          patents.

          Recently Issued Accounting Standards: On September 30, 2004, the
          Emerging Issues Task Force (EITF) reached a final consensus on Issue
          04-08, Accounting Issues Related to Certain Features of Contingently
          Convertible Debt and the Effect on Diluted Earnings Per Share (EITF
          No. 04-08), which would amend the guidance in SFAS No. 128, Earnings
          Per Share currently followed for diluted earnings per share (EPS)
          calculations. EITF No. 04-08 will require contingently convertible
          debt instruments with a market price contingency, such as the
          Company's outstanding $1,020.0 million aggregate principal amount of
          Floating Rate Convertible Senior Debentures due 2024, to be treated
          the same as traditional convertible debt instruments for EPS purposes
          (i.e., using the "if-converted" method). Traditional convertible debt
          reflects shares in diluted EPS (if dilutive) even if the stock price
          is below the conversion price. EITF No. 04-08 is effective for all
          periods ending after December 15, 2004 with restatement of previously
          reported diluted EPS calculations. Application of this EITF is
          expected to result in the inclusion of an additional 16,890,180 shares
          outstanding, or 1.0% to 1.3% of total shares outstanding, for purposes
          of calculating the Company's 2004 full year diluted earnings per
          share.


                                       8
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

Note 2.   Earnings (Loss) per Share
          -------------------------

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

<TABLE>
<CAPTION>
                                                               Three Months                  Nine Months
                                                            Ended September 30,          Ended September 30,
                                                          -----------------------      ------------------------
           (In thousands except per share amounts)           2004         2003            2004          2003
           ------------------------------------------     ----------    ---------      ----------    ----------
<S>                                                       <C>           <C>            <C>           <C>
           Net income (loss) less preferred dividends     $1,421,292    $(426,358)     $2,998,316    $1,715,902
           Denominator:
             Weighted average common shares
               outstanding                                 1,333,866    1,331,958       1,333,434     1,329,492
                                                          ----------    ---------      ----------     ---------

           Basic earnings (loss) per share                     $1.07       $(0.32)          $2.25         $1.29
                                                          ==========    =========      ==========    ==========

           Net income (loss)                              $1,421,292    $(426,358)     $2,998,340    $1,715,929
           Denominator:
             Weighted average common shares
               outstanding                                 1,333,866    1,331,958       1,333,434     1,329,492
             Common stock equivalents of
               outstanding stock options and
               deferred contingent common stock
               awards*                                         3,082          -             3,848         5,823
                                                          ----------    ---------      ----------    ----------
           Total shares*                                   1,336,948    1,331,958       1,337,282     1,335,315
                                                          ----------    ---------      ----------    ----------

           Diluted earnings (loss) per share*                  $1.06       $(0.32)          $2.24         $1.29
                                                          ==========    =========      ==========    ==========
</TABLE>

          *  At September 30, 2004 and 2003, approximately 124,261 and 85,809
             of common shares, respectively, related to options outstanding
             under the Company's Stock Incentive Plans were excluded from the
             computation of diluted earnings (loss) per share, as the effect
             would have been antidilutive.


                                       9
<PAGE>

                                      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 at the time of purchase 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 September 30, 2004 and December 31, 2003 were as follows:

<TABLE>
<CAPTION>
                                                                 Gross         Gross
          (In thousands)                                       Unrealized    Unrealized      Fair
          At September 30, 2004                     Cost         Gains        (Losses)       Value
          ----------------------------------     ----------    ----------    ----------    ----------
<S>                                              <C>           <C>           <C>           <C>
          Available-for-sale:
             U.S. Treasury securities               $72,370           $19         $(386)      $72,003
             Commercial paper                        45,508          -               (3)       45,505
             Certificates of deposit                 77,194             6           (89)       77,111
             Corporate debt securities              199,308           121          (108)      199,321
             Other debt securities                    4,373          -              (11)        4,362
             Equity securities                       47,875         7,932        (8,622)       47,185
             Institutional fixed income fund        531,427        15,990          -          547,417
                                                 ----------    ----------    ----------    ----------
          Total available-for-sale                  978,055        24,068        (9,219)      992,904
                                                 ----------    ----------    ----------    ----------
          Held-to-maturity:
             U.S. Treasury securities                $6,809          -             -           $6,809
             Commercial paper                       560,266          -             -          560,266
             Certificates of deposit                 42,130          -             -           42,130
             Other debt securities                    2,000          -             -            2,000
                                                 ----------    ----------    ----------    ----------
          Total held-to-maturity                    611,205          -             -          611,205
                                                 ----------    ----------    ----------    ----------
                                                 $1,589,260       $24,068       $(9,219)   $1,604,109
                                                 ==========    ==========    ==========    ==========

                                                                 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
                                                 ==========    ==========    ==========    ==========
</TABLE>


                                       10
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

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

                                                                     Fair
          (In thousands)                                 Cost        Value
          ----------------------------------------     --------     --------
          Available-for-sale:
             Due within one year                       $220,182     $220,028
             Due after one year through five years      161,973      161,699
             Due after five years through 10 years        2,598        2,568
             Due after 10 years                          14,000       14,007
                                                       --------     --------
                                                       $398,753     $398,302
                                                       ========     ========

          All held-to-maturity debt securities are due within one year and had
          aggregate fair values of $611.2 million at September 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.


                                       11
<PAGE>

                                      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 nine months ended September 30, 2004 and 2003
          (principally for the U.S.) was as follows:

<TABLE>
<CAPTION>
                                                                         Pensions
                                                      -----------------------------------------------
                                                         Three Months                Nine Months
                                                      Ended September 30,        Ended September 30,
          (In thousands)                              -------------------       ---------------------
          Components of Net Periodic Benefit Cost      2004        2003           2004         2003
          ---------------------------------------     -------     -------       --------     --------
<S>                                                   <C>         <C>           <C>          <C>
          Service cost                                $36,980     $29,837       $110,523      $89,217
          Interest cost                                64,187      62,211        192,376      186,646
          Expected return on plan assets              (77,607)    (67,610)      (232,754)    (202,656)
          Amortization of prior service cost            2,834       2,761          8,511        8,276
          Amortization of transition obligation          (398)       (388)        (1,225)      (1,140)
          Recognized net actuarial loss                25,066      26,071         75,220       78,199
          Settlement loss                                 -           -              -         13,034
                                                      -------     -------       --------     --------
          Net periodic benefit cost                   $51,062     $52,882       $152,651     $171,576
                                                      =======     =======       ========     ========
</TABLE>

<TABLE>
<CAPTION>
                                                              Other Postretirement Benefits
                                                      ----------------------------------------------
                                                         Three Months               Nine Months
                                                      Ended September 30,       Ended September 30,
          (In thousands)                              -------------------       --------------------
          Components of Net Periodic Benefit Cost      2004        2003          2004         2003
          ---------------------------------------     -------     -------       -------     --------
<S>                                                   <C>         <C>           <C>         <C>
          Service cost                                 $8,560      $9,525       $30,255      $28,564
          Interest cost                                18,256      23,574        64,429       70,692
          Amortization of prior service cost           (3,325)       (562)      (11,512)      (1,687)
          Recognized net actuarial loss                 4,144       4,676        15,755       14,023
                                                      -------     -------       -------     --------
          Net periodic benefit cost                   $27,635     $37,213       $98,927     $111,592
                                                      =======     =======       =======     ========
</TABLE>

          As of September 30, 2004, $258.0 million and $77.9 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 total contributions to be made
          during 2004 to fund its defined benefit pension and other
          postretirement benefit plans will approximate $265.0 million and $90.0
          million, respectively.

          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 Medicare Act). The Medicare Act provides for a federal
          subsidy to sponsors of retiree health care benefit plans that provide
          a benefit that is at


                                       12
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          least actuarially 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 Medicare 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 Medicare 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 Medicare Act decreased the Company's 2004 third quarter
          and first nine months postretirement benefits expense by approximately
          $7.7 million and $23.1 million, respectively.


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. Payments of $15.3 million and $38.6 million were
          made in the 2004 third quarter and first nine months, respectively. As
          of September 30, 2004, the 2003 restructuring reserve balance of $27.2
          million consists primarily of contract settlement costs, which, based
          on the contractual terms of the agreements, will be paid through 2005.

          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


                                       13
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          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 resulted in the elimination of approximately 3,150
          positions worldwide. As of September 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:

<TABLE>
<CAPTION>
                                                                     Payments/
                                                      Reserve at      Non-cash        Reserve at
          (In thousands)                  Total     December 31,       Charges     September 30,
          2002 Restructuring            Charges             2003       in 2004              2004
          ------------------------     --------     ------------     ---------     -------------
<S>                                    <C>          <C>              <C>           <C>
          Personnel costs              $194,600          $36,800      $(20,400)          $16,400
          Asset impairments              68,700              -             -                 -
          Other closure/exit costs       77,500           27,900       (15,000)           12,900
                                       --------     ------------     ---------     -------------
                                       $340,800          $64,700      $(35,400)          $29,300
                                       ========     ============     =========     =============
</TABLE>


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


                                       14
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          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 October 13, 2004, the Trust had recorded
          approximately 117,370 matrix claim forms. Approximately 31,880 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 85,490 forms, based on its analysis of data received
          from the Trust through October 13, 2004, is as follows. Approximately
          19,775 of the matrix claims had been processed to completion, with
          those claims either paid (approximately 3,620 payments, totaling
          $1,314.3 million, had been made to approximately 3,430 claimants),
          denied or in show cause proceedings (approximately 14,510) or
          withdrawn. Approximately 2,415 claims were in some stage of the 100%
          audit process ordered in late 2002 by the federal court overseeing the
          national settlement. Approximately 17,140 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 23,775 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 22,210 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 175 claims were in
          the data entry process and could not be assessed.

          In addition to the approximately 117,370 matrix claims filed as of
          October 13, 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


                                       15
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          or within the Trust's screening program. Once a claimant has
          demonstrated a matrix condition, the claimant may progress to advanced
          levels of the matrix beyond 2015.

          The Company's understanding, based on data received from the Trust
          through October 13, 2004, is that audits had produced preliminary or
          final results on 4,501 of the claims that had begun the 100% audit
          process since its inception. Of these, 1,625 were found to be payable
          at the amount claimed and 147 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
          94% of the approximately 17,140 matrix claimants who allege conditions
          that, if true, would entitle them to an award (and approximately 99%
          of the approximately 23,775 claims certified by physicians and/or law
          firms currently subject to the Trust's Claims 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 range from $199,872 to $669,497 on the
          settlement agreement's current payment matrix.)

          An investigation that the Company understands was 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 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 23,775 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 October 13, 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


                                       16
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          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 also prioritized the processing and 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 indefinitely
          suspend the payment and processing of claims for Level I and Level II
          matrix benefits. 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 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.
          The stay was eventually extended beyond its original expiration date,
          July 9, 2004, until August 10, 2004. On August 10, 2004, the parties
          filed a joint motion seeking preliminary approval of the proposed
          Seventh Amendment. By the terms of the court's orders, the filing
          automatically extended the stay of Level I and Level II claim
          processing until the court granted or denied preliminary approval.


                                       17
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          On August 26, 2004, United States District Judge Harvey Bartle III
          granted the motion for preliminary approval of the proposed Seventh
          Amendment. In addition to other terms of the court's order, the order
          directed that notice of the Seventh Amendment be provided to
          potentially affected class members beginning on September 10, 2004 (to
          be completed by September 15, 2004), established November 9, 2004 as
          the date by which class members could opt out of the proposed Seventh
          Amendment (and remain bound by the original settlement terms), or
          object to it, and scheduled a fairness hearing for January 18, 2005.
          Pursuant to the terms of the proposed Seventh Amendment, the Company
          retains the right to withdraw from the Seventh Amendment if
          participation by class members is inadequate or for any other reason.
          The Company must do so within 60 days of the end of the opt
          out/objection period (i.e., by January 8, 2005).

          If approved by the court following the fairness hearing and upheld on
          any appeals that might be taken, 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    After trial court approval, the Company would make initial
                    payments of up to $50.0 million to facilitate the
                    establishment of the Supplemental Fund and to begin
                    reviewing claims. Following approval by the federal court
                    overseeing the settlement and any appellate courts, the
                    Company would make an initial payment of $400.0 million to
                    enable the Supplemental Fund to begin paying claims. 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 might 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 heart
                    valve surgery or other more serious medical conditions on
                    Matrix Levels III through 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


                                       18
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

                    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    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 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 order entered by the District Court on August 26, 2004 that
          preliminarily approved the proposed Seventh Amendment also stayed
          certain matrix claim processing and certain aspects of the Claims
          Integrity Program, as specified in that order. The order stays the


                                       19
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          processing of all claims for Matrix Level I and Level II benefits
          (except such claims that have been the subject of a Trust
          determination after audit as of a specified date) until the end of the
          opt out/objection period (i.e., January 8, 2005), and thereafter for
          all claimants who participate in the Seventh Amendment. In addition,
          the order stays the Claims Integrity Program as to all Class Members
          who are eligible to participate in the Seventh Amendment until the end
          of the opt out/objection period (i.e., January 8, 2005), and
          thereafter for all such claimants who participate in the Seventh
          Amendment. This stay of the Claims Integrity Program does not prohibit
          the Trust from investigating whether there have been any material
          misrepresentations of fact in connection with claims for Level III
          through V Matrix benefits, as described in the order. The order
          further stays the motions described in the previous paragraph and the
          two lawsuits against physicians brought by the Trust that are
          described above, as well as any future legal actions similar to those
          two lawsuits, as defined in the Seventh Amendment. All of these stays
          will be discontinued if Wyeth decides to withdraw from the Seventh
          Amendment or the Seventh Amendment is not approved by the court and
          upheld on appeal.

          Certain Level I and Level II claims that had been found to have a
          reasonable medical basis following a Trust audit that was conducted
          prior to May 6, 2004 will continue to be processed as set forth in a
          District Court order also dated August 26, 2004. The Claims Integrity
          Program is stayed as to these claims, except that the Trust will have
          the right to investigate whether there has been intentional
          manipulation of the claim, as defined in that order.

          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


                                       20
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          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. The District Court
          overruled those objections and approved the amendment. The District
          Court's order approving the Sixth Amendment has been affirmed by the
          United States Court of Appeals for the Third Circuit.

          Some individuals who registered to participate in the settlement by
          May 3, 2003, who had been diagnosed with either FDA+ level
          regurgitation or mild mitral regurgitation on an 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 October 27, 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 October 27, 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 in several cases 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


                                       21
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          denied, as was the Company's petition to the United States Supreme
          Court for a writ of certiorari. The federal court overseeing the
          settlement has issued revised injunctions requiring some of plaintiffs
          subject to the earlier injunctions to litigate damages in a separate
          initial trial, with a subsequent trial on liability. That court has
          declined to impose such a requirement on a class-wide basis, at least
          at this time. The plaintiffs affected by those revised injunctions
          have filed an appeal with the United States Court of Appeals for the
          Third Circuit.

          In addition to the specific matters discussed herein, the federal
          court overseeing the national settlement has issued rulings concerning
          the processing of matrix claims that are being challenged on appeal.
          The United States Court of Appeals for the Third Circuit has postponed
          deciding those appeals pending decision on whether the proposed
          Seventh Amendment would be approved, and the appealing plaintiffs have
          agreed to dismiss those appeals in the event of such approval. 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.

          As of October 27, 2004, approximately 63,000 individuals who had filed
          Intermediate or Back-End opt out forms had served lawsuits on the
          Company. The claims of approximately 50% of the plaintiffs in the
          Intermediate and Back-End opt out cases served on the Company are
          pending in federal court, with approximately 40% pending in state
          courts. The claims of approximately 10% 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. In addition, a large number of plaintiffs have asked the United
          States Court of Appeals for the Third Circuit to review and reverse
          orders entered by the federal court overseeing the settlement which
          had denied the plaintiffs' motions to remand their cases to state
          court. The appellate court has not determined whether or not it will
          hear that challenge.

          The Company expects to vigorously challenge 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. As
          of October 27, 2004, approximately 1,700 Intermediate or Back-End opt
          out plaintiffs have had their lawsuits dismissed for procedural or
          medical deficiencies or for various other reasons.

          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)


                                       22
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          and continues to work toward resolving the rest. The Company intends
          to vigorously defend those initial opt out cases that cannot be
          resolved prior to trial.

          In addition to verdicts previously reported, on August 12, 2004, a
          Philadelphia jury in the Pennsylvania Court of Common Pleas, First
          Judicial District, hearing the Back-End opt out cases of Steward v.
          Wyeth, et al., No. 021002340, Ford v. Wyeth, et al., No. 020704036,
          Hargrove v. Wyeth, et al., No. 020800684, and Nixon v. Wyeth, et al.,
          No. 021101759 returned a defense verdict, finding that plaintiffs had
          not been damaged by their use of PONDIMIN and/or REDUX and that the
          Company had not been negligent in its marketing of PONDIMIN or REDUX.
          On August 20, 2004, a Philadelphia jury in the Pennsylvania Court of
          Common Pleas, First Judicial District, hearing the Intermediate opt
          out cases of Bernston v. Wyeth, et al., No. 021202304, and Connell v.
          Wyeth, et al., No. 021202454, returned a verdict finding that
          plaintiff Bernston had not been damaged by her use of PONDIMIN and
          that plaintiff Connell had been damaged in the amount of $50,000 by
          the use of PONDIMIN and REDUX. The Bernston case was thereupon
          dismissed and the parties resolved the Connell case. On October 22,
          2004, a Philadelphia jury in the Pennsylvania Court of Common Pleas,
          First Judicial District, hearing the Intermediate opt out cases of
          Feagins v. Wyeth, et al., No. 021202424, and Dupree v. Wyeth, et al.,
          No. 021202429, returned a verdict finding that plaintiff Feagins had
          not been damaged by her use of PONDIMIN and that plaintiff Dupree had
          been damaged in the amount of $41,195.12 by the use of PONDIMIN. The
          Feagins case was thereupon dismissed; the Company agreed not to
          contest liability in the Dupree case, but may pursue an appeal. On
          October 27, 2004, a Philadelphia jury in the Pennsylvania Court of
          Common Pleas, First Judicial District, hearing the Back-End opt out
          cases of Fernandez v. Wyeth, et al., No. 020704037, Joel Taylor v.
          Wyeth, et al., No. 020802581, and Ruby Taylor v. Wyeth, et al., No.
          021102104, returned a verdict finding that plaintiffs Joel Taylor and
          Ruby Taylor had not been damaged by their use of PONDIMIN and that
          plaintiff Fernandez had been damaged in the amount of $50,000 by her
          use of PONDIMIN. The two Taylor cases were thereupon dismissed and the
          parties resolved the Fernandez case. On November 2, 2004, a Norwalk,
          California jury in the California Superior Court, Los Angeles County,
          hearing the Intermediate opt out case of Hines v. Wyeth, et al., No.
          DD001645, returned a verdict finding that plaintiff had been damaged
          in the amount of $115,000 by his use of PONDIMIN. The
          Bernston/Connell, Feagins/Dupree, Fernandez/Taylor, and Hines 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 no damages were found in the
          Bernston, Feagins and two Taylor cases, because the Connell,
          Fernandez, and Hines cases were resolved after the damages phase and
          because the Company did not contest liability in the Dupree case, none
          of these cases proceeded to the liability phase.

          On October 6, 2004, a Philadelphia jury in the Pennsylvania Court of
          Common Pleas, First Judicial District, hearing the combined
          Intermediate opt out cases of Hansen v. Wyeth, et al., No. 021201063,
          Jensen v. Wyeth, et al., No 0021201202, Hill v. Wyeth, et al., No.
          021201207, and McMurdie v. Wyeth, et al., No. 021201386, in a reverse


                                       23
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          bifurcation format found that plaintiffs had been damaged in the
          aggregate amount of $2.135 million by their use of PONDIMIN and/or
          REDUX. The verdict dealt solely with the issue of damages. The trial
          resumed on October 25, 2004 and on November 3, 2004 the jury returned
          a verdict finding the Company liable for the damages determined in the
          earlier phase. The Company plans to appeal the verdict.

          In addition to the Intermediate and Back-End opt out cases that have
          gone to verdict, other such cases set for trial have been settled,
          dismissed or adjourned to a later date.

          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 has filed 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 was
          required by Texas law to post a bond in the amount of $25.0 million.
          The appeal process is expected to take one to two years at a minimum.

          As of October 14, 2004, the Company was a defendant in approximately
          340 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 70 of these cases appear
          to be eligible to pursue a PPH lawsuit under the terms of the national
          settlement. In approximately 45 of the approximately 340 cases, the
          Company expects the PPH claims to be voluntarily dismissed by the
          claimants (although they may continue to pursue other claims). In
          approximately 55 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
          to vigorously 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


                                       24
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          taken to date to $16,600.0 million. The $3,009.2 million reserve
          balance at September 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 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


                                       25
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

          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.

<TABLE>
<CAPTION>
                                                         Net Revenue
                                  ----------------------------------------------------------
                                        Three Months                     Nine Months
                                     Ended September 30,             Ended September 30,
          (In thousands)          -------------------------      ---------------------------
          Segment                   2004            2003            2004            2003
          -------------------     ----------     ----------      -----------     -----------
<S>                               <C>            <C>             <C>             <C>
          Pharmaceuticals         $3,622,263     $3,211,615      $10,222,826      $9,166,201
          Consumer Healthcare        651,100        660,835        1,830,853       1,745,924
          Animal Health              198,473        209,159          656,151         605,097
                                  ----------     ----------      -----------     -----------

          Total                   $4,471,836     $4,081,609      $12,709,830     $11,517,222
                                  ==========     ==========      ===========     ===========
</TABLE>

<TABLE>
<CAPTION>
                                                 Income (Loss) Before Taxes
                                  --------------------------------------------------------
                                        Three Months                    Nine Months
                                     Ended September 30,            Ended September 30,
          (In thousands)          -------------------------      -------------------------
          Segment                    2004           2003            2004           2003
          -------------------     ----------     ----------      ----------     ----------
<S>                               <C>            <C>             <C>            <C>
          Pharmaceuticals(1)      $1,252,897       $956,365      $3,090,850     $2,919,252
          Consumer Healthcare        175,740        191,424         389,833        420,628
          Animal Health               32,651         41,298         120,686        105,659
          Corporate(2)              (134,339)    (2,069,034)       (267,451)    (1,434,686)
                                  ----------     ----------      ----------     ----------

          Total(3)                $1,326,949      ($879,947)     $3,333,918     $2,010,853
                                  ==========      =========      ==========     ==========
</TABLE>

          (1)  Pharmaceuticals for the 2004 first nine months included a first
               quarter charge of $145,500 within Research and development
               expenses related to the upfront payment to Solvay Pharmaceuticals
               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 nine months included a first quarter
               gain of $860,554 related to the sale of Amgen shares. In
               addition, Corporate for the 2003 third quarter and first nine
               months included an additional charge of $2,000,000 related to the
               litigation brought against the Company regarding the use of the
               diet drugs REDUX or PONDIMIN.

          (3)  Income before taxes for the 2004 and 2003 first nine months
               included $165,000 and $293,500, 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.
               Gains from product divestitures were not significant in the third
               quarter of either 2004 or 2003.


                                       26
<PAGE>

                                      WYETH
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                   (Unaudited)

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).


Note 10.  Income Taxes
          ------------

          During the 2004 third quarter, the Company recorded a favorable income
          tax adjustment of $407.6 million ($0.30 per share-diluted) within the
          Provision (benefit) for federal and foreign taxes as a result of
          settlements of audit issues offset, in part, by a provision related to
          developments in the third quarter in connection with a prior year tax
          matter.

          On October 11, 2004, Congress passed the American Jobs Creation Act of
          2004 (the Act). The Act includes a temporary incentive for U.S.
          multinationals to repatriate foreign earnings, a domestic
          manufacturing deduction and international tax reforms designed to
          improve the global competitiveness of U.S. businesses. Wyeth is in the
          process of evaluating the impact of the Act and has not yet determined
          the effects of the Act on its effective tax rate and deferred tax
          assets and liabilities.


                                       27
<PAGE>

           Management's Discussion and Analysis of Financial Condition
                            and Results of Operations
              Three Months and Nine Months Ended September 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 81% of our consolidated
          net revenue for the first nine months of 2004 and 80% for the first
          nine months of 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 nine months of 2004 and 15% for
          the first nine months 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 5% of our consolidated net
          revenue for the first nine months of both 2004 and 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.

          Wyeth exhibited strong revenue growth for the 2004 first nine months,
          achieving a 10% increase in worldwide net revenue compared with the
          first nine months of 2003.


                                       28
<PAGE>

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

          Pharmaceuticals had net revenue growth of 12% to $10,222.8 million in
          the 2004 first nine months, which was spurred by the strong
          performance of several key products:

          o    EFFEXOR (a neuroscience therapy) - up 33% to $2,500.2 million
          o    PROTONIX (a gastroenterology drug) - up 9% to $1,177.9 million
          o    ZOSYN/TAZOCIN (an infectious disease drug) - up 22% to $560.5
               million
          o    ENBREL (a musculoskeletal therapy) - up 140% (internationally,
               where the Company has exclusive marketing rights) to $464.4
               million
          o    RAPAMUNE (an immunology product) - up 47% to $182.9 million

          Collectively, sales of these products increased 31% for the first nine
          months of 2004 compared with the first nine months of 2003.

          Other areas of revenue growth for the Pharmaceuticals segment for the
          2004 first nine months included ZOTON, BENEFIX and rhBMP-2 and
          alliance revenue from sales of ENBREL (in North America) 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 nine months. In
          September 2004, the U.S. Centers for Disease Control and Prevention
          (CDC) issued an updated recommendation for the use of PREVNAR
          reinstating the full, four-dose vaccination schedule. Net revenue of
          PREVNAR for the 2004 first nine months was $713.3 million, a decrease
          of 3% compared with the prior year, however, net revenue for the 2004
          third quarter was $320.8 million, an increase of 32% compared with the
          2003 third quarter.

          Both Consumer Healthcare and Animal Health posted increases in net
          revenue for the 2004 first nine months, but posted decreases in the
          2004 third quarter. Consumer Healthcare net revenue decreased 1% for
          the 2004 third quarter and increased 5% to $1,830.8 million for the
          2004 first nine months. Animal Health net revenue decreased 5% for the
          2004 third quarter reflecting the impact of the voluntary recall of
          PROHEART 6 in the U.S. market in September. For the 2004 first nine
          months, however, Animal Health net revenue increased 8% to $656.2
          million.

          On a combined basis, Pharmaceuticals and Consumer Healthcare realized
          aggregate pre-tax gains from product divestitures amounting to
          approximately $165.0 million for the first nine months of 2004,
          compared with $293.5 million from product divestitures for the first
          nine months of 2003.



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


                                       29
<PAGE>

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

          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.

          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, the Company expects to meet its
          production goal of 20 - 23 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, concomitant
          osteoporosis prevention and introduced low-dose versions of PREMARIN
          and PREMPRO in 2003. Despite these efforts, sales of the PREMARIN
          family of products declined from approximately $1,025.3 million for
          the first nine months of 2003 to $662.8 million for the first nine
          months of 2004. The launch of low-dose PREMARIN and PREMPRO has helped
          to moderate the decrease in sales.

          In November 2004, the Company entered into an agreement with Genzyme
          Corp. (Genzyme) for the sale of the Company's marketing rights to
          SYNVISC in the U.S. and five European countries. Under the terms of
          the agreement, Genzyme will pay upfront payments of $121.0 million as
          well as a series of milestone payments, based on the volume of SYNVISC
          sales, which could extend out to June 2012. The transaction is
          expected to close in the first quarter 2005.


                                       30
<PAGE>

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

          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 acquired
          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 its full-line wholesalers in the 2004 second quarter.
          Pursuant to these agreements, the wholesalers have agreed to provide
          data to Wyeth on wholesalers' inventory levels and to maintain
          inventory at certain targeted levels and, in return, the Company has
          agreed that the wholesalers will receive the opportunity to 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 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.


                                       31
<PAGE>

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

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

          Worldwide net revenue increased 10% for both the 2004 third quarter
          and first nine months compared with prior year levels. The increase in
          worldwide net revenue in the 2004 third quarter was due to increases
          in the Pharmaceuticals segment, offset in part, by decreases in the
          Consumer Healthcare and Animal Health segments. The increase in
          worldwide net revenue for the 2004 first nine months was due to
          increases in the Pharmaceuticals, Consumer Healthcare and Animal
          Health segments. Excluding the favorable impact of foreign exchange,
          worldwide net revenue increased 7% for both the 2004 third quarter and
          first nine months.

          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 September 30,
          (Dollars in millions)       ---------------------          % Increase/
          Segment                       2004         2003            (Decrease)
          ---------------------       --------     --------          -----------
          Pharmaceuticals             $3,622.2     $3,211.6              13%
          Consumer Healthcare            651.1        660.8              (1%)
          Animal Health                  198.5        209.2              (5%)
                                      --------     --------          -----------
          Total                       $4,471.8     $4,081.6              10%
                                      ========     ========          ===========


                                            Net Revenue
                                      -----------------------
                                            Nine Months
                                        Ended September 30,
          (Dollars in millions)       -----------------------
          Segment                       2004          2003           % Increase
          ---------------------       ---------     ---------        ----------
          Pharmaceuticals             $10,222.8      $9,166.2            12%
          Consumer Healthcare           1,830.8       1,745.9             5%
          Animal Health                   656.2         605.1             8%
                                      ---------     ---------        ----------
          Total                       $12,709.8     $11,517.2            10%
                                      =========     =========        ==========


                                       32
<PAGE>

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

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

          Worldwide Pharmaceuticals net revenue increased 13% for the 2004 third
          quarter and 12% for the 2004 first nine months. The increases in net
          revenue were due primarily to higher sales of EFFEXOR XR, 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 as a
          result of lower prescription volume and a reduction of inventory
          levels at one wholesaler. Increases in net revenue were also
          attributable to higher sales of PREVNAR for the 2004 third quarter as
          a result of increased manufacturing and filling capacity. Higher sales
          of EFFEXOR XR reflect growth resulting primarily from higher volume
          and price increases for the 2004 first nine months compared with the
          prior year. Strong prescription volume growth contributed to the
          increase in PROTONIX net revenue for the 2004 first nine months
          despite the impact of discounting in this product category.
          Additionally, alliance revenue increased 29% and 24% for the 2004
          third quarter and first nine months, respectively, as a result of
          increased sales of ENBREL (in North America) and the CYPHER stent.
          Excluding the favorable impact of foreign exchange, worldwide
          Pharmaceuticals net revenue increased 10% and 9% for the 2004 third
          quarter and first nine months, respectively.

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

<TABLE>
<CAPTION>
                                          Three Months                Nine Months
                                       Ended September 30,        Ended September 30,
                                      ---------------------      ----------------------
          (In millions)                 2004         2003          2004          2003
          ---------------------       --------     --------      ---------     --------
<S>                                   <C>          <C>           <C>           <C>
          EFFEXOR                       $892.7       $645.3       $2,500.2     $1,875.2
          PROTONIX                       378.2        407.0        1,177.9      1,077.4
          PREVNAR                        320.8        242.5          713.3        736.2
          Nutritionals                   247.1        214.5          691.2        632.6
          PREMARIN family                174.2        346.0          662.8      1,025.3
          ZOSYN / TAZOCIN                196.8        173.5          560.5        458.6
          ENBREL                         173.4         85.9          464.4        193.3
          Oral Contraceptives            154.7        144.0          438.5        432.9
          ZOTON                          121.0         93.2          347.7        252.3
          BENEFIX                         72.6         64.1          223.6        185.2
          REFACTO                         61.2         57.8          185.5        166.6
          RAPAMUNE                        68.5         38.9          182.9        124.4
          ATIVAN                          51.3         48.4          150.6        158.4
          SYNVISC                         48.1         55.0          149.7        165.1
          rhBMP-2                         41.5         17.8          118.1         40.2
          Alliance revenue               237.9        184.1          539.3        435.3
          Other                          382.2        393.6        1,116.6      1,207.2
                                      --------     --------      ---------     --------
          Total Pharmaceuticals       $3,622.2     $3,211.6      $10,222.8     $9,166.2
                                      ========     ========      =========     ========
</TABLE>


                                       33
<PAGE>

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

          Consumer Healthcare
          -------------------

          Worldwide Consumer Healthcare net revenue decreased 1% for the 2004
          third quarter and increased 5% for the 2004 first nine months. The
          decrease in Consumer Healthcare net revenue for the 2004 third quarter
          was due primarily to lower sales of ALAVERT, as compared to the prior
          year when the product launch was underway, and lower sales of ADVIL
          due to timing of promotional programs offset, in part, by higher sales
          of ROBITUSSIN. The 2004 first nine months included higher sales of
          CENTRUM, ADVIL, CALTRATE and ROBITUSSIN. Excluding the favorable
          impact of foreign exchange, worldwide Consumer Healthcare net revenue
          decreased 3% for the 2004 third quarter and increased 2% for the 2004
          first nine months.

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

<TABLE>
<CAPTION>
                                           Three Months                Nine Months
                                        Ended September 30,        Ended September 30,
                                        -------------------       ---------------------
          (In millions)                  2004         2003          2004         2003
          -------------------------     ------       ------       --------     --------
<S>                                     <C>          <C>          <C>          <C>
          CENTRUM                       $150.1       $148.3         $444.6       $402.3
          ADVIL                          117.9        126.9          355.3        335.3
          ROBITUSSIN                      73.7         68.7          151.0        135.7
          CALTRATE                        46.3         44.1          131.3        113.0
          ADVIL COLD & SINUS              37.2         35.3           88.8         87.8
          SOLGAR                          26.8         26.9           82.0         82.1
          CHAPSTICK                       30.7         29.9           74.2         69.3
          DIMETAPP                        26.8         26.8           61.6         56.8
          ALAVERT                         15.7         25.8           49.2         77.5
          Other                          125.9        128.1          392.8        386.1
                                        ------       ------       --------     --------

          Total Consumer Healthcare     $651.1       $660.8       $1,830.8     $1,745.9
                                        ======       ======       ========     ========
</TABLE>


                                       34
<PAGE>

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

          Animal Health
          -------------

          Worldwide Animal Health net revenue decreased 5% for the 2004 third
          quarter and increased 8% for the 2004 first nine months. The decrease
          in Animal Health net revenue for the 2004 third quarter was due
          primarily to decreases in equine products related to lower sales of
          WEST NILE-INNOVATOR (dosing transition and product competition) and
          decreases in companion animal products impacted by product returns
          resulting from the voluntary recall of PROHEART 6 in the U.S. market
          in September. A FDA advisory panel to review post-marketing safety
          data and to make recommendations regarding future use of PROHEART 6 is
          expected to convene early next year. The increase in Animal Health net
          revenue for the 2004 first nine months was 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. PROHEART products, the largest contributor to the
          companion animal products sales growth for the 2004 first nine months,
          had net revenue of $33.8 million compared with $28.4 million for the
          similar period in the prior year. PROHEART products for the 2004 third
          quarter had negative net revenue of $1.8 million as a result of
          product returns due to the voluntary recall, as noted above, compared
          with net revenue of $7.2 million for the similar period in the prior
          year. Excluding the favorable impact of foreign exchange, worldwide
          Animal Health net revenue decreased 7% for the 2004 third quarter and
          increased 5% for 2004 first nine months.

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

<TABLE>
<CAPTION>
                                           Three Months               Nine Months
                                        Ended September 30,       Ended September 30,
                                        -------------------       -------------------
          (In millions)                  2004         2003         2004         2003
          -------------------------     ------       ------       ------       ------
<S>                                     <C>          <C>          <C>          <C>
          Livestock products             $89.1        $92.0       $265.3       $243.3
          Companion animal products       60.8         65.7        202.4        173.0
          Equine products                 25.9         29.0        117.7        123.8
          Poultry products                22.7         22.5         70.8         65.0
                                        ------       ------       ------       ------

          Total Animal Health           $198.5       $209.2       $656.2       $605.1
                                        ======       ======       ======       ======
</TABLE>


                                       35
<PAGE>

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

          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:

<TABLE>
<CAPTION>
                                                 % Increase (Decrease)                              % Increase (Decrease)
                                        Three Months Ended September 30, 2004              Nine Months Ended September 30, 2004
                                    ---------------------------------------------     ---------------------------------------------

                                                         Foreign         Total                             Foreign         Total
                                    Volume     Price     Exchange     Net Revenue     Volume     Price     Exchange     Net Revenue
                                    ------     -----     --------     -----------     ------     -----     --------     -----------
<S>                                 <C>        <C>       <C>          <C>             <C>        <C>       <C>          <C>
          Pharmaceuticals
          -------------------
          United States                 -         8%           -               8%        (1%)       6%           -               5%
          International                14%        -            7%             21%        15%        -            7%             22%
                                       ---        --           --             ---        ---        --           --             ---
          Total                         5%        5%           3%             13%         5%        4%           3%             12%
                                       ===        ==           ==             ===        ===        ==           ==             ===

          Consumer Healthcare
          -------------------
          United States                (6%)       1%           -              (5%)        -         -            -               -
          International                (3%)       4%           5%              6%         3%        3%           7%             13%
                                       ---        --           --             ---        ---        --           --             ---
          Total                        (5%)       2%           2%             (1%)        1%        1%           3%              5%
                                       ===        ==           ==             ===         ==        ==           ==              ==

          Animal Health
          -------------------
          United States               (20%)       4%           -             (16%)       (3%)       7%           -               4%
          International                 1%        2%           5%              8%         4%        1%           8%             13%
                                       ---        --           --             ---         --        --           --             ---
          Total                       (10%)       3%           2%             (5%)        -         5%           3%              8%
                                       ===        ==           ==             ===         ==        ==           ==              ==

          Total
          -------------------
          United States                (2%)       6%           -               4%        (1%)       5%           -               4%
          International                11%        1%           6%             18%        12%        1%           7%             20%
                                       ---        --           --             ---        ---        --           --             ---
          Total                         3%        4%           3%             10%         4%        3%           3%             10%
                                       ===        ==           ==             ===        ===        ==           ==             ===
</TABLE>


          The Company deducts certain items from gross revenue, which primarily
          consist of provisions for product returns, cash discounts,
          chargebacks, rebates, customer allowances and consumer sales
          incentives. Chargebacks and rebates are the only deductions from gross
          revenue that are considered significant by the Company and
          approximated $589.9 million and $1,769.7 million for the 2004 third
          quarter and first nine months, respectively, compared with $463.5
          million and $1,249.1 million for the 2003 third quarter and first nine
          months. The increase in chargebacks and rebates for the 2004 third
          quarter and first nine months was due primarily to higher rebate rates
          and increased volumes of PROTONIX.

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

          Cost of goods sold, as a percentage of Net revenue, decreased to 26.0%
          for the 2004 third quarter compared with 27.6% for the 2003 third
          quarter due primarily to lower inventory and manufacturing losses in
          the Pharmaceuticals segment. The increase in gross margin was also due
          to an increase in alliance revenue offset, in part, by an increase in
          royalty costs (higher sales of ENBREL and PREVNAR in Europe) in the
          Pharmaceuticals segment. Cost of goods sold, as a percentage of Net
          revenue, remained constant at 26.7% for the 2004 and 2003 first nine
          months. Gross margin for the 2004 first nine months was


                                       36
<PAGE>

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

          impacted by an increase in alliance revenue (higher sales of ENBREL in
          North America), with no corresponding costs of goods sold, and lower
          cost of goods sold, as a percentage of net revenue, in the Consumer
          Healthcare and Animal Health segments. These increases were offset, in
          part, by an increase in costs of goods sold, as a percentage of net
          revenue, in the Pharmaceuticals segment due primarily to higher
          royalty costs (higher sales of ENBREL in Europe) and a less profitable
          product mix caused by lower sales of higher margin products, including
          the PREMARIN family of products, 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.

          Selling, general and administrative expenses, as a percentage of Net
          revenue, decreased to 31.8% for the 2004 third quarter and 33.1% for
          the 2004 first nine months compared with 32.2% for the 2003 third
          quarter and 34.4% for the 2003 first nine months due primarily to net
          revenue increasing at a higher rate than expenses (10% vs. 8% for the
          2004 third quarter and 10% vs. 6% for the 2004 first nine months). The
          2004 third quarter and first nine months were impacted by higher
          selling expenses related to an expansion in the Pharmaceuticals
          contract sales force to support the continued promotion of PROTONIX
          and EFFEXOR.

          Research and development expenses increased 5% for the 2004 third
          quarter and 20% for the 2004 first nine months 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 nine months 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.


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

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

<TABLE>
<CAPTION>
                                              Three Months                  Nine Months
                                           Ended September 30,          Ended September 30,
                                           -------------------          -------------------
          (In millions)                    2004          2003            2004         2003
          ----------------------------     -----         -----          ------       ------
<S>                                        <C>           <C>            <C>          <C>
          Interest expense                 $77.5         $73.8          $223.7       $217.6
          Interest income                  (28.4)        (19.5)          (73.2)       (57.9)
          Less: amount capitalized for
            capital projects               (22.5)        (30.0)          (65.1)       (82.5)
                                           -----         -----          ------       ------

          Total interest expense, net      $26.6         $24.3           $85.4        $77.2
                                           =====         =====          ======       ======
</TABLE>


                                       37
<PAGE>

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

          Interest expense, net increased 9% for the 2004 third quarter and 11%
          for the 2004 first nine months due primarily to lower capitalized
          interest offset, in part, by higher interest income. Weighted average
          debt outstanding during the 2004 third quarter and first nine months
          was $7,999.7 million and $8,283.2 million, respectively, compared with
          prior year levels of $7,079.2 million and $7,142.3 million,
          respectively. The impact of higher weighted average debt outstanding
          on interest expense was offset by increases in interest income earned
          on higher cash balances in 2004 versus 2003. 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 $15.7 million for the 2004 third quarter
          and $152.2 million for the 2004 first nine months 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.


          Income (Loss) Before Taxes
          --------------------------

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

<TABLE>
<CAPTION>
                                                                Income (Loss) Before Taxes
                                    ---------------------------------------------------------------------------------
                                                Three Months                                  Nine Months
                                             Ended September 30,                         Ended September 30,
                                    -------------------------------------       -------------------------------------
          (Dollars in millions)                               % Increase/                                 % Increase/
          Segment                     2004         2003       (Decrease)          2004         2003       (Decrease)
          ---------------------     --------     --------     -----------       --------     --------     -----------
<S>                                 <C>          <C>          <C>               <C>          <C>          <C>
          Pharmaceuticals(1)        $1,252.9       $956.4             31%       $3,090.9     $2,919.2              6%
          Consumer Healthcare          175.7        191.4             (8%)         389.8        420.6             (7%)
          Animal Health                 32.7         41.3            (21%)         120.7        105.7             14%
          Corporate(2)                (134.4)    (2,069.0)           (94%)        (267.5)    (1,434.6)           (81%)
                                    --------     --------            ----       --------     --------            ----

          Total(3)                  $1,326.9      $(879.9)             -        $3,333.9     $2,010.9             66%
                                    ========     ========            ====       ========     ========            ====
</TABLE>


          (1)  Pharmaceuticals for the 2004 first nine months 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 nine
               months results, but including Pharmaceuticals product divestiture


                                       38
<PAGE>

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

               gains discussed in footnote 3 below, Pharmaceuticals income
               before taxes increased 11%.

          (2)  Corporate for the 2003 first nine months included a first quarter
               gain of $860.6 related to the sale of Amgen shares. In addition,
               Corporate for the 2003 third quarter and first nine months
               included a charge of $2,000.0 related to the REDUX and PONDIMIN
               diet drug litigation. Excluding these items from the 2004 and
               2003 first nine months, Corporate expenses decreased 9%.

          (3)  Income before taxes included $165.0 and $293.5 for the 2004 and
               2003 first nine months, 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. Gains from
               product divestitures were not significant in the third quarter of
               either 2004 or 2003.

          Worldwide Pharmaceuticals income before taxes for the 2004 third
          quarter and first nine months increased 31% and 6%, respectively. The
          increase for the 2004 third quarter was due primarily to higher net
          revenue, increased gross profit margins earned on worldwide sales of
          Pharmaceuticals products and lower selling and general expenses, as a
          percentage of net revenue. The increase for the 2004 first nine months
          was due primarily to higher net revenue offset, in part, by higher
          research and development expenses related to the upfront payment to
          Solvay, and lower other income, net related to product divestiture
          gains.

          Worldwide Consumer Healthcare income before taxes decreased 8% for the
          2004 third quarter and 7% for the 2004 first nine months, while
          Consumer Healthcare net revenue decreased 1% for the 2004 third
          quarter and increased 5% for the 2004 first nine months. The
          difference between the decrease in income before taxes and net revenue
          growth for the 2004 first nine months is primarily attributable to
          lower other income, net related to product divestiture gains and
          higher 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 decreased 21% for the 2004
          third quarter and increased 14% for the 2004 first nine months. The
          decrease for the 2004 third quarter was due primarily to lower net
          revenue and higher selling and general expenses. The increase in the
          2004 first nine months 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 third quarter were $134.4 million
          compared with $2,069.0 million for the 2003 third quarter. Corporate
          expenses for the 2004 first nine months were $267.5 million compared
          with $1,434.6 million for the 2003 first nine months. Corporate
          expenses for the 2003 third quarter and first nine months included a
          charge of $2,000.0 million to increase the reserve related to the
          REDUX and PONDIMIN diet drug litigation. Corporate expenses for the
          2003 first nine months also included a gain of $860.6 million from the
          sale of the Company's Amgen shares. Excluding these items, Corporate
          expenses would have increased 95% for the 2004 third quarter and
          decreased 9% for the 2004 first nine months. The increase for the 2004
          third quarter was due primarily to the non-recurrence of certain 2003
          items, while the decrease


                                       39
<PAGE>

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

          for the 2004 first nine months was due primarily to lower general and
          administrative expenses related to decreased pension and employee
          benefit costs.


          Income Taxes
          ------------

          Excluding the impact of the items discussed below under "Consolidated
          Net Income (Loss) and Diluted Earnings (Loss) Per Share Results", the
          effective tax rate increased to 23.6% for the 2004 third quarter and
          22.8% for the 2004 first nine months compared with 22.0% for both the
          2003 third quarter and first nine months. The 2004 third quarter and
          first nine months rates were calculated assuming the benefit of
          certain research and development tax credits. Since the law allowing
          such credits expired in June 2004 and was reinstated after September
          30, 2004, only one-half of the annualized benefit was included in the
          effective tax rate calculation for the 2004 third quarter and first
          nine months. The annualized benefit will be included in the effective
          tax rate calculation for the 2004 fourth quarter and full year.


          Consolidated Net Income (Loss) and Diluted Earnings (Loss) Per Share
          --------------------------------------------------------------------
          Results
          -------

          Net income and diluted earnings per share for the 2004 third quarter
          were $1,421.3 million and $1.06, respectively, compared with net loss
          and diluted loss per share of $426.4 million and $0.32 in the prior
          year. Net income and diluted earnings per share for the 2004 first
          nine months were $2,998.3 million and $2.24, respectively, compared
          with net income and diluted earnings per share of $1,715.9 million and
          $1.29 in the prior year, increases of 75% and 74%, respectively.

          The Company's management uses various measures to manage and evaluate
          the Company's performance and believes it is appropriate to
          specifically identify certain items included in net income (loss) and
          diluted earnings (loss) per share to assist investors with analyzing
          ongoing business performance and trends. In particular, the Company's
          management believes that comparisons between 2004 and 2003 results of
          operations are influenced by the impact of the following items that
          are included in net income (loss) and diluted earnings (loss) per
          share:

          o    2004 third quarter favorable income tax adjustment of $407.6
               million ($0.30 per share-diluted) related to settlements of audit
               issues, offset, in part, by a provision related to developments
               in the third quarter in connection with a prior year tax matter;
          o    2004 first quarter upfront payment of $145.5 million ($94.6
               million after-tax or $0.07 per share-diluted) to Solvay;
          o    2003 first quarter gain of $860.6 million ($558.7 million
               after-tax or $0.42 per share-diluted) related to the Company's
               liquidation of Amgen shares received in connection with Amgen's
               acquisition of Immunex; and


                                       40
<PAGE>

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

          o    2003 third quarter diet drug litigation charge of $2,000.0
               million ($1,300.0 million after-tax or $0.98 per share-diluted).

          The income tax adjustment relates to certain prior tax years and has
          been identified by the Company's management when evaluating the
          Company's performance due to its nature and magnitude. The significant
          upfront payment related to the co-development and co-commercialization
          of the four neuroscience compounds being developed with Solvay, which
          was immediately expensed and included in Research and development
          expenses, has also been identified. Additionally, the Amgen gain and
          previous gains related to the Immunex/Amgen common stock transactions
          has been identified 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.
          Finally, the 2003 third quarter diet drug charge increased the reserve
          balance for a continuing legal matter that first resulted in a charge
          in 1999 and has been identified due to its magnitude. Isolating these
          items when reviewing the Company's results provides a more appropriate
          view of operations for these accounting periods.

          Excluding the items noted above, the increases in net revenue and
          diluted earnings per share for the 2004 third quarter and first nine
          months 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 research and development spending and lower
          other income, net related to product divestiture gains.

          Gains from product divestitures constitute an integral part of the
          Company's analysis of divisional performance and are important to
          understanding changes in our reported net income. Gains from product
          divestitures for the 2004 first nine months were $165.0 million
          ($109.3 million after-tax or $0.08 per share-diluted) compared with
          $293.5 million ($190.9 million after-tax or $0.14 per share-diluted)
          for the 2003 first nine months. Gains from product divestitures were
          not significant in the third quarter of either 2004 or 2003.


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

          Cash flows provided by operating activities totaling $1,857.7 million
          during the 2004 first nine months were generated primarily by net
          earnings of $2,998.3 million offset, in part, by payments of $631.4
          million for working capital requirements and payments of $507.4
          million relating to the diet drug litigation (see Note 7 to the
          consolidated condensed financial statements). Cash provided by
          deferred taxes of $168.0 million, as of September 30, 2004, primarily
          consisted of a decrease in deferred tax assets of $177.6 million
          related to current year diet drug payments. Cash used for deferred
          taxes of $727.8 million, as of September 30, 2003, resulted
          principally from an increase in deferred tax assets of $700.0 million
          during the 2003 third quarter related to the $2,000.0 million diet
          drug litigation charge. The change in working capital, which used
          $631.4 million of cash as of September 30, 2004, excluding the effects
          of foreign exchange,


                                       41
<PAGE>

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

          primarily consisted of a decrease in accounts payable and accrued
          expenses of $373.7 million relating to timing of payments and an
          increase in accounts receivable of $297.9 million relating to
          increased sales. The change in working capital, which provided $451.4
          million of cash as of September 30, 2003, excluding the effects of
          foreign exchange, primarily consisted of an increase in accrued
          federal and foreign taxes of $635.4 million relating to an increase in
          the income tax provision mainly due to the gain on sale of Amgen
          shares and an increase in accounts payable and accrued expenses of
          $106.5 million due to timing of payments offset, in part, by an
          increase in inventories of $329.8 million resulting from higher
          production levels of key products such as EFFEXOR, PROTONIX, REFACTO
          and PREVNAR.

          During the 2004 first nine months, the Company used $869.6 million of
          cash for investments in property, plant and equipment and $1,533.2
          million of cash for purchases of marketable securities. In addition,
          the Company received investment proceeds through the sales and
          maturities of marketable securities of $1,024.1 million and the sales
          of assets totaling $348.1 million. The capital expenditures made
          during the 2004 first nine months 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 in the 2004 first nine months
          included repayments of debt totaling $1,504.9 million and dividend
          payments of $920.1 million.

          At September 30, 2004, the Company had outstanding $8,149.0 million in
          total debt, which consisted of notes payable and other debt.
          Maturities of the Company's obligations as of September 30, 2004 are
          set forth below.

<TABLE>
<CAPTION>
                                         Less than                                   Over
          (In millions)      Total        1 year       1-3 years     4-5 years     5 years
          -------------     --------     ---------     ---------     ---------     --------

<S>                         <C>          <C>           <C>           <C>           <C>
          Total debt        $8,149.0      $336.2        $312.5         $18.1       $7,482.2
</TABLE>


          The following  represents the Company's credit ratings as of September
          30, 2004 and as of November 5, 2004:

<TABLE>
<CAPTION>
                                          Moody's                  S&P                Fitch
                                 ----------------     ----------------     ----------------
<S>                              <C>                  <C>                  <C>
          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
</TABLE>


          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


                                       42
<PAGE>

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

          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.


          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 continue to 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 56%,
          respectively, compared with the average weekly


                                       43
<PAGE>

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

          prescriptions written during the eight-week period preceding the 2002
          termination of the study subset.

          Set forth below are individual product operating results for
          PREMPRO/PREMPHASE and PREMARIN for the three and nine months ended
          September 30, 2004 and 2003:

                                               Prempro/Premphase
                                -----------------------------------------------
                                   Three Months                 Nine Months
                                Ended September 30,         Ended September 30,
                                -------------------         -------------------
          (In millions)          2004         2003           2004         2003
          -----------------     ------       ------         ------       ------
          Net revenue            $51.2        $66.0         $168.2       $231.0
          Gross profit            42.9         47.1          133.1        162.2


                                                   Premarin
                                -----------------------------------------------
                                   Three Months                 Nine Months
                                Ended September 30,         Ended September 30,
                                -------------------         -------------------
          (In millions)          2004         2003           2004         2003
          -----------------     ------       ------         ------       ------
          Net revenue           $123.0       $280.0         $494.6       $794.3
          Gross profit            97.2        236.3          407.2        693.0


          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 September 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 is
          considered adequate to cover expected returns for the PREMARIN family
          of products.

          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


                                       44
<PAGE>

           Management's Discussion and Analysis of Financial Condition
                            and Results of Operations
              Three Months and Nine Months Ended September 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. In addition, growth in
          overall usage of antidepressants 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.

          The FDA is in the process of implementing class labeling for
          antidepressants that will, among other things, more prominently
          highlight the already labeled risk of suicide in adolescents in a
          "black box" warning. That final labeling is expected in the first
          quarter of 2005. In addition, the regulatory authority in the United
          Kingdom is currently reviewing certain safety issues regarding EFFEXOR
          and other antidepressants. The


                                       45
<PAGE>

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

          Company is currently communicating with the regulatory authority
          regarding their concerns. The Company expects continuing regulatory
          scrutiny of the drugs in this therapeutic area, including EFFEXOR.

          The Company cannot predict the level of impact these issues may have
          on future global usage of EFFEXOR.

          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 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. Productivity
          improvements and process enhancements at existing facilities continue
          to improve the supply capacity for ENBREL. 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. In October 2004, the FDA
          approved the manufacture of ENBREL bulk drug substance by Genentech.
          The current plan for the longer term includes an additional
          manufacturing facility, which is being constructed by the Company in
          Grange Castle, 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 and again in September to recommend that
          Health Care Providers return to a three and then four-dose schedule,
          respectively, for healthy children and initiate efforts to vaccinate
          those children who had had doses deferred. In March of 2004, the
          European Agency for the Evaluation of Medicinal Products issued
          interim dosing recommendations to reduce usage. In September these
          recommendations were revised to reinstate pre-shortage
          recommendations. 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 expects to meet
          its 2004 production goal of 20 - 23 million doses.

          The Company is in discussions with the European Medicines Agency
          regarding manufacturing and quality issues at a manufacturing site for
          PREVNAR. The Company is working with the authority to resolve these
          issues and cannot predict what impact, if any, this will have on
          PREVNAR sales.
                                       46
<PAGE>

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

          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.

          Research and Development Pipeline

          The Company previously discussed at its June 2004 R&D Analyst Meeting,
          among other R&D projects, tanaproget, a nonsteroidal oral
          contraceptive. The Company has suspended active development of
          tanaproget while the scope of its commercial profile is further
          evaluated. Strategic alternatives for advancing tanaproget into Phase
          3 development are under consideration, including external partnering
          or out-licensure.

          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 for the year
          ended December 31, 2003, the Company's Quarterly Reports on Form 10-Q
          for the quarters ended March 31, 2004 and June 30, 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, PREMARIN and EFFEXOR, 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 reserves 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


                                       47
<PAGE>

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

          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;
          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    the impact of regulatory action and public discussion of
               suicidality in usage of EFFEXOR;
          o    environmental liabilities;
          o    the accuracy of our estimates and assumptions utilized in our
               critical accounting policies;


                                       48
<PAGE>

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

          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, as well as 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 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)


                                       49
<PAGE>

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

          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; (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; and (vii) regulatory
          action affecting labeling of products and impact on usage of such
          product;

          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 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


                                       50
<PAGE>

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

          including, without limitation, litigation associated with the prior
          formulation of DIMETAPP, the prior formulation of ROBITUSSIN, PREMPRO,
          PREMARIN, EFFEXOR 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.


                                       51
<PAGE>

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 September 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)      $1,628.4          $(3.2)          $(3.2)
          Interest rate swaps         5,300.0          171.1           171.1
          Outstanding debt (2)        7,977.9       (8,149.0)       (8,218.0)


          (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 contracts would decrease or increase by approximately
               $87.4.

          (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 $654.8.

          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 September 30, 2004 and the
          fair value of outstanding debt instruments reflects a current yield
          valuation based on observed market prices as of September 30, 2004.


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

          As of September 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 third 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.


                                       52
<PAGE>

                           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 Reports on Form 10-Q for the
          quarters ended March 31, 2004 and June 30, 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 September 30, 2004, payments into the REDUX and PONDIMIN
          national settlement funds, individual settlement payments, legal fees
          and other costs totaling $13,590.8 million were paid and applied
          against the litigation accrual. At September 30, 2004, $3,009.2
          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.
          The stay was eventually extended beyond its original expiration date,
          July 9, 2004, until August 10, 2004. On August 10, 2004, the parties
          filed a joint motion seeking preliminary approval of the proposed
          Seventh Amendment. By the terms of the court's orders, the filing
          automatically extended the stay of Level I and Level II claim
          processing until the court granted or denied preliminary approval.

          On August 26, 2004, United States District Judge Harvey Bartle III
          granted the motion for preliminary approval of the proposed Seventh
          Amendment. In addition to other terms of the court's order, the order
          directed that notice of the Seventh Amendment be provided to
          potentially affected class members beginning on September 10, 2004 (to
          be completed by September 15, 2004), established November 9, 2004 as
          the date by which class members could opt out of the proposed Seventh
          Amendment (and remain bound by the original settlement terms), or
          object to it, and scheduled a fairness hearing for January 18, 2005.
          Pursuant to the terms of the proposed Seventh Amendment, the Company
          retains the right to withdraw from the Seventh Amendment if
          participation by class members is inadequate or for any other reason.
          The Company must do so within 60 days of the end of the opt
          out/objection period (i.e., by January 8, 2005).


                                       53
<PAGE>

          If approved by the court following the fairness hearing and upheld on
          any appeals that might be taken, 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    After trial court approval, the Company would make initial
                    payments of up to $50.0 million to facilitate the
                    establishment of the Supplemental Fund and to begin
                    reviewing claims. Following approval by the federal court
                    overseeing the settlement and any appellate courts, the
                    Company would make an initial payment of $400.0 million to
                    enable the Supplemental Fund to begin paying claims. 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 might 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 heart
                    valve surgery or other more serious medical conditions on
                    Matrix Levels III through 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    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.


                                       54
<PAGE>

          As of October 27, 2004, approximately 63,000 individuals who had filed
          Intermediate or Back-End opt out forms had served lawsuits on the
          Company. The claims of approximately 50% of the plaintiffs in the
          Intermediate and Back-End opt out cases served on the Company are
          pending in federal court, with approximately 40% pending in state
          courts. The claims of approximately 10% 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. In addition, a large number of plaintiffs have asked the United
          States Court of Appeals for the Third Circuit to review and reverse
          orders entered by the federal court overseeing the settlement which
          had denied the plaintiffs' motions to remand their cases to state
          court. The appellate court has not determined whether or not it will
          hear that challenge.

          The Company expects to vigorously challenge 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. As
          of October 27, 2004, approximately 1,700 Intermediate or Back-End opt
          out plaintiffs have had their lawsuits dismissed for procedural or
          medical deficiencies or for various other reasons.

          In addition to verdicts previously reported, on August 12, 2004, a
          Philadelphia jury in the Pennsylvania Court of Common Pleas, First
          Judicial District, hearing the Back-End opt out cases of Steward v.
          Wyeth, et al., No. 021002340, Ford v. Wyeth, et al., No. 020704036,
          Hargrove v. Wyeth, et al., No. 020800684, and Nixon v. Wyeth, et al.,
          No. 021101759 returned a defense verdict, finding that plaintiffs had
          not been damaged by their use of PONDIMIN and/or REDUX and that the
          Company had not been negligent in its marketing of PONDIMIN or REDUX.
          On August 20, 2004, a Philadelphia jury in the Pennsylvania Court of
          Common Pleas, First Judicial District, hearing the Intermediate opt
          out cases of Bernston v. Wyeth, et al., No. 021202304, and Connell v.
          Wyeth, et al., No. 021202454, returned a verdict finding that
          plaintiff Bernston had not been damaged by her use of PONDIMIN and
          that plaintiff Connell had been damaged in the amount of $50,000 by
          the use of PONDIMIN and REDUX. The Bernston case was thereupon
          dismissed and the parties resolved the Connell case. On October 22,
          2004, a Philadelphia jury in the Pennsylvania Court of Common Pleas,
          First Judicial District, hearing the Intermediate opt out cases of
          Feagins v. Wyeth, et al., No. 021202424, and Dupree v. Wyeth, et al.,
          No. 021202429, returned a verdict finding that plaintiff Feagins had
          not been damaged by her use of PONDIMIN and that plaintiff Dupree had
          been damaged in the amount of $41,195.12 by the use of PONDIMIN. The
          Feagins case was thereupon dismissed; the Company agreed not to
          contest liability in the Dupree case, but may pursue an appeal. On
          October 27, 2004, a Philadelphia jury in the Pennsylvania Court of
          Common Pleas, First Judicial District, hearing the Back-End opt out
          cases of Fernandez v. Wyeth, et al., No. 020704037, Joel Taylor v.
          Wyeth, et al., No. 020802581, and Ruby Taylor v. Wyeth, et al., No.
          021102104, returned a verdict finding that plaintiffs Joel Taylor and
          Ruby Taylor had not been damaged by their use of PONDIMIN and that


                                       55
<PAGE>

          plaintiff Fernandez had been damaged in the amount of $50,000 by her
          use of PONDIMIN. The two Taylor cases were thereupon dismissed and the
          parties resolved the Fernandez case. On November 2, 2004, a Norwalk,
          California jury in the California Superior Court, Los Angeles County,
          hearing the Intermediate opt out case of Hines v. Wyeth, et al., No.
          DD001645, returned a verdict finding that plaintiff had been damaged
          in the amount of $115,000 by his use of PONDIMIN. The
          Bernston/Connell, Feagins/Dupree, Fernandez/Taylor, and Hines 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 no damages were found in the
          Bernston, Feagins and two Taylor cases, because the Connell,
          Fernandez, and Hines cases were resolved after the damages phase and
          because the Company did not contest liability in the Dupree case, none
          of these cases proceeded to the liability phase.

          On October 6, 2004, a Philadelphia jury in the Pennsylvania Court of
          Common Pleas, First Judicial District, hearing the combined
          Intermediate opt out cases of Hansen v. Wyeth, et al., No. 021201063,
          Jensen v. Wyeth, et al., No 0021201202, Hill v. Wyeth, et al., No.
          021201207, and McMurdie v. Wyeth, et al., No. 021201386, in a reverse
          bifurcation format found that plaintiffs had been damaged in the
          aggregate amount of $2.135 million by their use of PONDIMIN and/or
          REDUX. The verdict dealt solely with the issue of damages. The trial
          resumed on October 25, 2004 and on November 3, 2004, the jury returned
          a verdict finding the Company liable for the damages determined in the
          earlier phase. The Company plans to appeal the verdict.

          In addition to the Intermediate and Back-End opt out cases that have
          gone to verdict, other such cases set for trial have been settled,
          dismissed or adjourned to a later date.

          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 has filed 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 was
          required by Texas law to post a bond in the amount of $25.0 million.
          The appeal process is expected to take one to two years at a minimum.

          As of October 14, 2004, the Company was a defendant in approximately
          340 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


                                       56
<PAGE>

          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 70 of these
          cases appear to be eligible to pursue a PPH lawsuit under the terms of
          the national settlement. In approximately 45 of the approximately 340
          cases, the Company expects the PPH claims to be voluntarily dismissed
          by the claimants (although they may continue to pursue other claims).
          In approximately 55 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
          to vigorously 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, two
          additional putative class action lawsuits have been filed. The
          putative class representative in Tiedemann, et al. v. Wyeth, et al.,
          No. 110063/04 (N.Y. Sup. Ct., New York Cty.), seeks to represent a
          class of all New York women who ingested prescription hormone therapy
          (HT) medication "on a regular basis" and allegedly suffered personal
          injury as a result. Medical monitoring and compensatory and punitive
          damages are also sought. The putative class representative in Lesser,
          et al. v. Wyeth, et al., No. 04110280 (N.Y. Sup. Ct., New York Cty.),
          seeks to represent a class of all New York residents who used HT and
          were prescribed the product by a physician licensed and practicing in
          New York. Compensatory damages, medical monitoring costs and punitive
          damages are sought. The Company is currently defending approximately
          2,560 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 4,100 women allegedly injured by PREMPRO or
          PREMARIN.

          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 685 lawsuits (on behalf
          of a total of approximately 1,100 plaintiffs).

          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 370 lawsuits in
          various state and federal courts involving 949 vaccine recipients. Of
          those 949 vaccine recipients, 484 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 484 Vaccine Court petitioners, 43 have withdrawn from
          Vaccine Court (33 of whom are currently proceeding with lawsuits
          against the Company), and 414 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 4,300 petitions pending as
          part of an Omnibus Autism


                                       57
<PAGE>

          Proceeding in Vaccine Court, but it is unknown how many of those
          petitioners received one or more vaccines manufactured and distributed
          by the Company.

          The Company has been named as a defendant in a putative class action
          (filed, but not yet served upon the Company) brought on behalf of all
          former or present EFFEXOR patients who, after August 20, 1997,
          suffered from an alleged dependency or withdrawal syndrome following
          the reduction or termination of their dosage of EFFEXOR. Carolina, et
          al. v. Wyeth, et al., No. 04CV-608P, U.S.D.C., N.D. Ok. The complaint
          asserts causes of action for strict liability, failure to warn,
          negligent failure to warn, fraud, intentional infliction of emotional
          distress and violations of the federal Food, Drug & Cosmetic Act and
          seeks compensatory and punitive damages on behalf of the class.

          A putative class action lawsuit has been filed involving the
          veterinary product PROHEART 6, which the Company's Fort Dodge Animal
          Health subsidiary voluntarily recalled from the market in September
          2004. The putative class representative in Dill, et al. v. American
          Home Products, et al., No. CJ 1004 05879 (Dist. Ct., Tulsa Cty., OK)
          seeks to represent a class of all Oklahoma individuals whose canines
          have been injured or died as a result of being injected with PROHEART
          6. Compensatory and punitive damages are sought.

          In the litigation against the Company and other pharmaceutical
          manufacturers alleging that the defendant companies violated federal
          antitrust statutes and certain state laws by unlawfully agreeing to
          engage in conduct to prevent U.S. consumers from purchasing
          defendants' prescription drugs from Canada, the plaintiffs have filed
          an amended complaint that consolidates what were seven separate
          actions into a single purported class action, now entitled In re
          Canadian Import Antitrust Litigation, Civ. No. 04-2724 (JNE/JGL),
          U.S.D.C., D. Minn. Additionally, another action, Clayworth v. Pfizer,
          et al., No. RG04172428, Calif. Super. Ct., Alameda Cty, has been filed
          against the Company in California state court alleging certain
          violations of California state law. This action is brought on behalf
          of California pharmacies and alleges that the defendant pharmaceutical
          manufacturers engaged in a price-fixing conspiracy in the United
          States that was carried out by, among other allegations, efforts to
          restrict Canadian drugs from coming into the United States. The
          California action alleges that, as a result of the claimed conspiracy,
          the pharmacy plaintiffs paid higher prices for the defendants'
          pharmaceutical products than they otherwise would have paid. The
          Company intends to vigorously defend these actions.

          Broadview Pharmacy, a retail pharmacy located in Toronto, Canada,
          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, alleging that
          Wyeth Canada refused to supply the pharmacy with Wyeth Canada's
          prescription pharmaceutical products. On September 20, 2004, the
          Competition Tribunal denied Broadview's petition.

          In connection with the antitrust multi-district litigation proceedings
          in which direct and indirect purchasers of K-Dur 20 allege that the
          Company's settlement of certain patent infringement litigation with
          Schering-Plough unlawfully delayed the market entry of


                                       58
<PAGE>

          generic competition for K-Dur 20, the district court has preliminarily
          approved the Company's settlement with a putative class of direct
          purchaser plaintiffs. The Company anticipates that a final approval
          hearing will occur within the next several months.

          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, the
          United States Court of Appeals for the Sixth Circuit has recently
          denied the Company's appeal of the district court's decision to grant
          the indirect-purchasers' motion for class certification in Ferrell, et
          al. v. Wyeth-Ayerst Labs., Inc., Civ. A. No. C-1-01-447, U.S.D.C.,
          S.D. Oh. In addition, the Company has appealed to the California Court
          of Appeals, First Appellate District, the Superior Court's decision to
          grant an indirect purchaser's motion for class certification in
          Blevins v. Wyeth-Ayerst Labs., Inc., et al., Case No. 324380, Cal.
          Super. Ct., San Francisco Cty. The Company intends to vigorously
          defend the antitrust lawsuits involving PREMARIN.

          Medtronic Sofamor Danek (Medtronic) is Wyeth's licensee for certain
          products utilizing Wyeth's recombinant BMP-2 protein, in particular
          the INFUSE Bone Graft/LT-CAGE Lumbar Tapered Fusion Device System
          (Infuse). In a case involving technology agreements, Medtronic Sofamor
          Danek, Inc. vs. Gary K. Michelson, M.D. and Karlin Technology, Inc.,
          Civ. Action No. 01-2373 (U.S. District Court for the Western District
          of Tennessee), a jury found Medtronic liable for $109.0 million in
          compensatory damages and $400.0 million in punitive damages. Wyeth was
          not a party to that action and is not liable for the damages awarded.
          As part of its verdict, the jury found that Infuse infringed U.S.
          patents 6,080,155, 6,270,498 and 6,210,412 and awarded royalties at a
          rate of 10%. The patent owner has not requested an injunction as to
          sales of Infuse. If an injunction were to be issued, Wyeth's sales of
          BMP-2 could be impacted. Medtronic has advised Wyeth that it intends
          to appeal.

          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.


                                       59
<PAGE>

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

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

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

               (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.



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

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

               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).

               o    August 11, 2004 relating to furnishing information on
                    Wyeth's diet drug litigation (Item 9 disclosure).

               o    September 30, 2004 relating to the election of Frances D.
                    Fergusson, Ph.D. to Wyeth's Board of Directors (Items 5.02
                    and 9.01 disclosure).

               o    October 20, 2004 relating to furnishing Wyeth's earnings
                    results for the 2004 third quarter (Item 2.02 disclosure).


                                       60
<PAGE>

                                    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: November 9, 2004


                                       61
<PAGE>

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


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

          (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