NEW JERSEY ? Pfizer, Michigan?s biggest life sciences employer, reported Thursday that its third-quarter net income dropped 77 percent after the company decided to drop Exubera, its inhaled insulin product, which forced Pfizer to write off $2.8 billion.

Pfizer, which is in the process of abandoning its operations in Ann Arbor and Holland, MI., still retains operations and several thousand employees in Kalamazoo at its animal research facility. The Michigan layoffs were announced in January when Pfizer said it would cut about 10,000 jobs worldwide. Sales have been hampered in recent quarters by the loss of exclusivity for several of its drugs, such as Zithromax, Zoloft and Norvasc.

World-wide sales of cholesterol drug Lipitor declined 5 percent to $3.2 billion. Lipitor, the best-selling drug in the world, saw 9 percent growth in international markets while the U.S. market dropped 13 percent, as patients turned to generic competitor Simvastatin.

It?s this increased competition from generic drugs that help lower Pfizer?s third quarter income to $761 million, or 11 cents a share, down from $3.36 billion, or 46 cents a share, a year earlier.

Adjusted earnings, a company-preferred measure of performance that excludes restructuring costs and other items, were 58 cents a share. Sales fell 2 percent to $12 billion from $12.3 billion.

The pretax charges, primarily from the write-off of assets related to Exubera, comprised about $1.1 billion of intangible assets, $661 million of inventory, $454 million of fixed assets and $584 million of other exit costs.

Last year, Pfizer acquired world-wide rights to manufacture and sell Exubera, an inhaled insulin, from Sanofi-Aventis for about $1.4 billion. But Pfizer said second-quarter 2007 world-wide revenue from this product was $4 million, which the company called “disappointing.”

Pfizer also cut its 2007 earnings guidance to $1.01 to $1.10 a share from its previous guidance of $1.30 to $1.41 a share, but narrowed its revenue estimate range to $47.5 billion to $48 billion, from $47 billion to $48 billion. Pfizer also narrowed its adjusted earnings estimate to $2.10 to $2.15 a share from its previous estimate of $2.08 to $2.15 a share.

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