J&J Again Buoyed by Pharmaceuticals -- Update
October 18 2016 - 9:15AM
Dow Jones News
By Anne Steele
Johnson & Johnson lifted the low end of its guidance and
posted better-than-anticipated results in the latest quarter as the
health-care giant's pharmaceutical business continues to buoy its
top line.
The New Brunswick, N.J., company now expects earnings for the
year of $6.68 to $6.73 a share, compared with its previous guidance
for $6.63 on the bottom. It backed its revenue forecast of $71.5
billion to $72.2 billion.
Chief Executive Alex Gorsky said results reflect the success of
new product launches and the strength of core businesses, "driven
by strong growth in our pharmaceuticals business."
"With a number of regulatory approvals, several new drug
application submissions and new breakthrough therapy designations
from the FDA, we are increasingly confident in our pipeline
expectation of filing 10 new pharmaceutical products between 2015
and 2019, each with revenue potential over $1 billion," he
said.
Still, J&J faces the threat of lower-priced competition
emerging for some top-selling prescription drugs. And with about
half of its sales overseas, J&J's results have been pressured
by a strengthening U.S. dollar and weakness in some emerging
markets.
On Monday, Pfizer Inc. said it would begin selling a biosimilar
version of blockbuster rheumatoid-arthritis treatment Remicade in
late November at a 15% discount to the brand-name drug's list
price. J&J promised to fight the biosimilar's launch, setting
up for a fierce battle between two of the biggest drug companies in
the world in the courts as well as in contract talks with health
insurers.
During the most recent period, sales of Remicade -- one of
J&J's top sellers -- surged 18% world-wide, as the
pharmaceutical business, the company's largest, continued to propel
J&J. Prescription-drug sales grew 9.2% to $8.4 billion, driven
by strength in new products including blood-cancer drug Imbruvica,
blood thinner Xarelto and multiple myeloma drug Darzalex. Worldwide
remicade
J&J's other segments, however, continued to lag. During the
quarter, sales of J&J consumer health products slipped 1.6% to
$3.26 billion, dragged down by currency headwinds.
Meanwhile, J&J's medical device sales rose just 1.1% to
$6.16 billion. The business used to be J&J's largest, but has
stumbled amid pricing pressures, increased competition and market
changes. In response, J&J has exited certain areas, rejiggered
how it sells devices and focused on high-growth categories like
robotics and staplers.
In all for the September quarter, J&J posted a profit of
$4.27 billion, or $1.53 a share, up from $3.36 billion, or $1.20 a
share, in the same period a year ago.
Excluding certain items, adjusted earnings ticked up to $1.68 a
share. Analysts polled by Thomson Reuters were looking for an
adjusted $1.66 a share. Revenue climbed 4.2% to $17.8 billion,
edging in just above analyst estimates for $17.74 billion.
Unfavorable currency rates shaved 0.1% off the quarter's total.
Shares, which have risen 15% so far this year, lost 0.4%
premarket to $118.03.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
October 18, 2016 09:00 ET (13:00 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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