J&J’s CEO Alex Gorsky
Johnson & Johnson kicked off the second-quarter results season with a 21 per cent increase in pharma turnover that came on the back of rocketing sales of hepatitis drug Olysio.
Pent-up demand for Olysio (simeprevir) among hepatitis C patients drove $831m-worth of sales in the second quarter and sets the drug on course to clear $2bn in its first full year on the market, but J&J chief executive Alex Gorsky believes that pace of growth will not be sustainable for long.
“For the second half of the year, we will have competition for Olysio that we did not have in the first two quarters,” he told investors yesterday, as the company reported pharma sales of $8.5bn and total group sales up 9.1 per cent to $19.5bn.
J&J will try to position Olysio as a key constituent of new interferon-free HCV regimens and already has a marketing application with the FDA for the drug alongside Gilead Sciences’ Sovaldi (sofosbuvir), whose growth in the first few months has eclipsed even Olysio.
With sales of J&J’s former hepatitis C blockbuster Incivo (telaprevir) fading fast in the face of competition – falling more than 45 per cent in the first half of the year to $183m – the company is reluctant to speculate on Olysio’s sales trajectory. Its biggest challenge will come if Gilead wins approval for a combination of Sovaldi with another of its hepatitis C drugs later this year.
“We’re not providing guidance for 2015 [but competition] will certainly pose a headwind next year,” said chief financial officer Dominic Caruso.
The good news for J&J is that Olysio is backed by a number of other recent product launches that are also delivering solid growth for the company. Zytiga (abiraterone) for prostate cancer surged 42 per cent to $562m in the second quarter, psoriasis drug Stelara (ustekinumab) rose by the same margin to $628m and anticoagulant Xarelto (rivaroxaban) was up more than 90 per cent to $361m.
The financial performance was not enough to stop shares in J&J slipping 2 per cent yesterday, particularly as the company only raised its earnings guidance for the year by a fraction.
J&J is continuing to invest in R&D at a higher proportion of sales as many of its big pharma peers, and chief scientific officer Paul Stoffels said was a consequence of the company’s focus on ‘transformational innovation’, in other words focusing on game-changing therapies in core therapeutic areas, and particularly in immuno-oncology.
He highlighted a number of pipeline drugs with significant potential, including daratumumab, the first anti-CD38 antibody for multiple myeloma, androgen receptor inhibitor ARN-509 for pre-metastatic prostate cancer and guselkumab, an anti-IL-23 antibody for psoriasis.