Please login to the form below

Not currently logged in
Email:
Password:

Charges bring J&J profit down by 89 per cent despite sales increase

Recalls and litigation totalling $2.86bn make their mark on US firm

Johnson & Johnson (J&J) has reported a fall in net profit of 89 per cent in its financial results for 2011, due mainly to a series of recall and litigation charges.

The US-based company had to pay out $2.86bn over the year, bringing net earnings down to $218m. This compares to $1.94bn net profit made by J&J during 2010.

It wasn't a good start to 2011 for J&J, with the recall of 47m units of over-the-counter medicines including painkiller Tylenol (acetaminophen), decongestant Sudafed (pseudoephedrine) and antacid Rolaids (calcium carbonate and magnesium).

Further charges related to costs associated with recalls of schizophrenia drugs Risperdal, anti-seizure drug Topamax (topiramate), the company's DePuy ASR Hip device and even more recalls of Tylenol.

The company also faced costs related to its planned acquisition of medical device maker Synthes for $21.3bn.

However, J&J said that excluding such one-off charges for both 2011 and 2010, net earnings for the year would have increased by 4.4 per cent to $13.9bn.

This underlying positive growth was seen in the company's annual revenue performance, with total company sales increasing by 5.6 per cent to $65.00bn.

This was mainly due to a strong non-US performance, with international sales increasing 12.4 per cent to $36.12bn.

US sales fell by 1.8 per cent, however, with recalls affecting availability of certain products.

The market should pick up though, with J&J currently making efforts to improve standards at the Fort Washington, Pennsylvania, facility where quality control problems were responsible for many of the recalls.

The plant, operated by J&J's McNeil Consumer Healthcare unit, is expected to reopen in 2013, with J&J to re-introduce recalled products manufactured elsewhere during 2012.

William C Weldon, chair and CEO, said: “We delivered solid results for 2011, built on the strong growth of our recently launched pharmaceutical products, and continued the steady momentum of new product approvals across all our businesses.”

Positives for the company included strong results for anti-inflammatory Remicade (infliximab), with worldwide sales of $5.49bn, as well as annual sales of over $1bn for Prezista (darunavir) and Velcade (bortezomib), both of which the company acquired from Crucell.

The US Food and Drug Administration (FDA) also approved an additional indication for anticoagulant Xarelto (rivaroxaban) for use in the reduction of stroke and systemic embolism in patients with nonvalvular atrial fibrillation.

However, 2012 has got off to a similar start in terms of charges, with J&J paying $158m to settle a Texas lawsuit accusing it of mismarketing Risperdal.

25th January 2012

Share

Featured jobs

Subscribe to our email news alerts

PMHub

Add my company
Four Health

Beautiful things happen when you put the right ingredients together. It’s the reason that we mix behaviour change experts with...

Latest intelligence

PM Society Digital Awards – the power of together
Our chief executive, Emma Statham, writes about the value of awards and the power of together....
Seduction_feature_image_thumb.jpg
Seduce anyone in four simple steps
You know the health of the global economy is dependent on our ability to seduce one another – don’t you? And you know that we need to be able to...
What Would Jeremy Do? : Assessing the impact of a Corbyn-led Labour government
GK Strategy are delighted to announce the launch our latest briefing paper entitled ‘What Would Jeremy Do? Assessing the impact of a Corbyn-led Labour government’....

Infographics