J&J Brushes Off Pfizer's Challenge -- WSJ
October 19 2016 - 3:03AM
Dow Jones News
By Jonathan D. Rockoff and Anne Steele
Johnson & Johnson on Tuesday sought to reassure investors
and analysts that lower-priced competition for one of its
top-selling products won't slow a company that posted slightly
better-than-expected results in the third quarter.
The health-products company said world-wide sales in the quarter
grew by 4.2%, to $17.8 billion. The company reported 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.
Looking ahead, J&J lifted the low end of its financial
guidance for the year.
J&J's shares have performed strongly, up 15% this year,
propelled by a drugs business that has been delivering new big
sellers. But shares fell 2% Tuesday morning as investors digested
the announcement from rival Pfizer Inc. late Monday that it planned
to challenge J&J's Remicade rheumatoid-arthritis treatment by
launching a lower-priced copy, known as a biosimilar, in late
November.
Pfizer said its biosimilar, called Inflectra, would list for a
price 15% less than Remicade's. A year's Remicade treatment can
cost $28,945 for many patients before rebates.
Remicade was J&J's top-selling drug in the quarter, with
$1.2 billion in U.S. sales alone. Chief Financial Officer Dominic
Caruso said on a conference call that J&J didn't expect its
yearly results to be affected by any Inflectra competition.
Analysts say the competition could reduce Remicade sales by $1
billion next year. Yet J&J officials sought to push back on
concerns about the impact, especially in the near-term. They noted
the company is fighting Inflectra in the courts.
Joaquin Duato, J&J's pharmaceuticals chief, also said the
company expected stable Remicade patients to stay on the therapy,
and that J&J will compete on price. The discount Pfizer is
offering on Inflectra is at the bottom of the range that analysts
and payers had expected.
J&J also detailed how new uses for existing medicines and
drug launches through 2019 could offset any sales losses and
provide new revenue growth.
Mr. Duato said the company is working on 10 line extensions on
existing products that could add more than $500 million in sales
apiece and 10 new drugs that could have $1 billion or more in sales
each.
"We plan to continue to grow our pharmaceuticals business in the
face of biosimilar competition," including in the treatment of
immunology diseases like the ones treated by Remicade, Mr. Duato
said in an interview.
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 at the bottom end of the range. It repeated its revenue
forecast of $71.5 billion to $72.2 billion.
Prescription-drug sales grew 9.2% to $8.4 billion in the
quarter, driven by strength in new products including blood-cancer
drug Imbruvica, blood-thinner Xarelto and multiple myeloma therapy
Darzalex.
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.
Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and
Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
October 19, 2016 02:48 ET (06:48 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Johnson and Johnson (NYSE:JNJ)
Historical Stock Chart
From Aug 2024 to Sep 2024
Johnson and Johnson (NYSE:JNJ)
Historical Stock Chart
From Sep 2023 to Sep 2024