Johnson & Johnson saw its first-quarter sales rise 8.5 per cent to $17.5bn thanks to medical device acquisitions and the return to the market of a number of recalled over-the-counter (OTC) medicines.
Net earnings fell to $3.5bn from $3.9bn in the same period in 2012, largely thanks to costs associated with the acquisition of medical device company Synthes, ongoing remediation work at some of J&J’s manufacturing plants and litigation charges, but were ahead of analyst expectations.
The company said the sales increase was also helped by new pharmaceutical product introductions, including its depot antipsychotic Invega Sustenna/Xeplion (paliperidone palmitate), which grew 76 per cent to $284m in the quarter, and prostate cancer drug Zytiga (abiraterone), which rose 72 per cent to $344m.
Xarelto (rivaroxaban) added $158m to J&J’ coffers – up from just $27m a year ago – despite the company’s ongoing difficulties securing a new indication for the drug in acute coronary syndrome (ACS) in the US.
On the downside, attention-deficit hyperactivity disorder (ADHD) product Concerta (methylphenidate) and gastrointestinal drug Aciphex/Pariet (rabeprazole) continued to be affected by generic competition. Concerta fell 17 per cent to $256m, while Aciphex was down almost a third to $378m.
Consumer healthcare sales rose a little over 2 per cent to $3.7bn after some steep declines in recent quarters thanks to manufacturing compliance problems that forced widespread recalls for a number of key OTC brands, including the Tylenol painkiller range. In the US, the recovery was even more marked, with sales up 14 per cent.
J&J currently has three plants under regulatory scrutiny, including its main facility in Fort Washington, Philadelphia, which is still under a production block until it can be brought up to code, with this expected later this year or in early 2014.
Medical devices and diagnostics sales rose nearly 12 per cent to $7.1bn, with the contribution from Synthes offsetting sales lost following the disposal of J&J DePuy trauma products business.
“We are off to a good start in 2013 with solid results in the first quarter,” J&J chief executive Dominic Caruso told analysts on a conference call yesterday.
However, he sounded a note of caution on the overall state of the healthcare market, suggesting that this is at best stabilising and a positive trend in the fourth quarter of 2012 does not appear to have been sustained.
“At this point we are not anticipating a meaningful market acceleration this year,” he said.