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J&J earnings top expectations, but feels the squeeze in US

Blockbuster Xarelto declines 14% due to US competition

J&J

Johnson & Johnson has released fourth quarter results showing better than expected overall growth, but also signs of a squeeze on some of its biggest products.

This includes cardiovascular blockbuster Xarelto, which saw a 14.4% decline, despite the FDA approving a new 2.5mg dose for those with chronic coronary or peripheral arterial disease (CAD/PAD).

The new approval increases Xarelto’s treatable patient population by around 13 million the US, but it was only given the go-ahead in October, making it too soon to see any resulting upturn in sales.

J&J chalked up the sales decline to a competitive US market, thrown into turmoil  last year by Trump’s drug pricing agenda.

This resulted in many pharma giants, including Novartis and Pfizer, freezing their drug prices and prompting further discounting the most competitive markets.

On yesterday's analyst call, the company said it remains excited by the potential to increase Xarelto’s treatable patient population with the new indication, and that initial customer response has been positive.

Nevertheless, the company's annual revenues rose almost 7% to $81.6bn, driven up by three rising star performers in particular: psoriasis treatment Stelara, leukaemia drug Imbruvica and multiple myeloma Darzalex.

Prostate cancer drug Zytiga sales fall 12.7% in the US thanks to new generic competition, while pulmonary hypertension medicine Tracleer declined by around 25% for the same reason.

The company is hoping to retain a share of the prostate cancer market, however, via its new treatment Erleada. The drug gained US approval last year, and has just gained marketing clearance in the EU.

Anti-inflammatory medicine Remicade also saw a sales drop  21% due to price reductions, but its still holding on to a remarkable 93% of its market share, holding out against biosimilar competition including Sandoz’ Zessly.

Its medical device division saw sales decline by $6.7bn, declining by 2.2%, and underperforming on Wall Street analysts predictions of $6.68bn.

Although the company says it expects the division to improve as it delivers “innovation that will have an enduring impact on patients, caregivers and consumers”.

This includes the progression of digital surgery platforms, while capitalising on its portfolio and accelerating growth strategy.

This time last year, the company improved the divisions’ operational growth by 1.1% compared to its previous year.

“We know we still have more work to do, and we are committed to returning to above-market growth in 2020,” it said.

23rd January 2019

From: Sales

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