Cost-cutting measures pay off for US healthcare company with profit up to $3.9bn in its first quarter financial report
Johnson & Johnson has posted a 12.5 per cent hike in first quarter profit to $3.9bn thanks to cost-cutting measures, although sales were still depressed by its lingering manufacturing problems.
Sales in the quarter slipped marginally to $16.1bn, falling short of analyst expectations by a couple of hundred million dollars but were buoyed by a strong performance by arthritis drug Remicade (infliximab) which grew 18 per cent to $1.5bn.
Also propping up revenues was multiple myeloma drug Velcade (bortezomib) which grew 26.1 per cent to $353m.
Overall, US sales fell 5 per cent because of the ongoing suspension of manufacturing at J&J's consumer health product manufacturing facility in Fort Washington and a shortage in cancer drug Doxil/Caelyx (liposomal doxorubicin) caused by quality issues at contract manufacturer Ben Venue Laboratories.
The company also faced generic competition for antibiotic Levaquin (levofloxacin), which slumped more than 90 per cent to $29m.
J&J's pharma sales rose 1.2 per cent to $6.1bn, boosted by recently-launched products such as Zytiga (abiraterone acetate) for prostate cancer, which added $200m to J&J's coffers in the quarter, as well as psoriasis drug Stelara (ustekinumab) and hepatitis C treatment Incivo (telaprevir).
On the downside, big sellers such as antipsychotic drug Risperal (risperidone) fell almost 11 per cent to $361m while sales of red blood cell stimulator Procrit (epoetin alfa) declined 5 per cent to $376m.
Consumer health sales declined 2.4 per cent to $3.6bn, with J&J revealing that while a number of its over-the-counter medicines have returned to the market it now expects the rehabilitation of its Fort Washington facility to longer than anticipated, with a likely completion date of late 2013.
"We continue to bring meaningful innovations to our patients and customers through the strong performance of our recently launched products," said J&J chief executive William Weldon in what is likely to be his last results statement ahead of the succession of Alex Gorsky as CEO on April 26.