Johnson & Johnson (J&J) has said it may consider a sale or spin-out of its diabetes care companies, which make products like insulin pumps and glucose monitors.
The US group said it was considering “potential strategic options” for its LifeScan, Animas and Calibra Medical subsidiaries, which added around $1.8bn to J&J’s total group revenues of $71.9bn in 2016. An outright sale of the units – separately or together – as well as joint ventures, alliances and other options are under consideration, it said.
J&J is in the midst of negotiating a possible takeover of Swiss biotech Actelion, but gave no update on that process in its fourth-quarter presentations.
The diabetes care announcement came as J&J’s fourth quarter sales fell below analyst estimates, with top-selling drug Remicade (infliximab) slipping just over 3% to $1.6bn, possibly affected by the recent launch of a biosimilar competitor – Pfizer’s Inflectra – in the US at a 15% discount to the brand.
Psoriasis therapy Stelara (ustekinumab) grew 18.5% to $879m, narrowly missing analysts’ estimates thanks to increasing competition in the indication from newer drugs such as the interleukin-17 antagonist, headed by Novartis’ new blockbuster Cosentyx (secukinumab).
On the plus side, blood cancer therapy Imbruvica (ibrutinib) leaped 47% to $346m – spurred by a series of new approvals in B-cell malignancies including most recently marginal zone lymphoma (MZL) – while novel oral anticoagulant Xarelto (rivaroxaban) continued to deliver, rising 21% to $598m in the quarter. New multiple myeloma therapy Darzalex (daratumumab) reached $200m, up from $20m a year ago.
Overall, J&J’s pharma sales climbed 6.5% to $33.5bn, but analysts at Leerink said competition to big brands and the risk of downward pricing pressure – particularly in the US – could “heighten investor anxiety”.
Investors did react negatively to J&J’s forecasted 2017 revenues and earnings – which came in below expectations – and shares in the company were down around 2% yesterday. However, chief financial officer Dominic Caruso said the shortfall was a result of adverse currency factors – specifically a strengthening US dollar.