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Higher overseas sales push up J&J Q2 results

Johnson & Johnson has posted Q2 FY07 sales of USD 15.1bn, an increase of 13.2 per cent, compared with Q2 FY06, as overseas sales increased 18.4 per cent

Johnson & Johnson (J&J) has posted Q2 FY07 sales of USD 15.1bn, an increase of 13.2 per cent, compared with Q2 FY06, as overseas sales increased 18.4 per cent on positive currency impacts.

Worldwide Pharmaceutical sales of USD 6.1bn in the quarter represented an increase over the prior year of 5.8 per cent with operational growth of 3.8 per cent and a positive impact from currency of 2.0 per cent. Domestic sales increased 4.8 per cent, while international sales increased 7.6 per cent (2.0 per cent from operations and 5.6 per cent from currency benefits).

Sales growth reflects the strong performance of Topamax (topiramate), an antiepileptic and a treatment for the prevention of migraine headaches; Remicade (infliximab), a biologic approved for the treatment of a number of immune mediated inflammatory diseases; J&J's antipsychotic franchise, which includes Risperdal (risperidone), Risperdal Consta (risperidone long-acting injection) and Invega (paliperidone); and Concerta (methylphenidate), a treatment for attention deficit hyperactivity disorder, also performed strongly.

Sales hiccups
However, US sales of the company's anaemia drug Procrit (epoetin alfa) dropped 14 per cent to rest at USD 449m. The fall was due to cardiovascular safety concerns for erythropoiesis-stimulating agents in general. In Q1 2007, an FDA regulatory panel demanded warning labels to be upgraded on all marketed anaemia drugs: J&J's Procrit and Amgen's Aranesp (darbepoetin alfa) and Epogen (epoetin alfa).

Poorer sales for J&J's Cypher stent were also noted, with a 30 per cent drop due to increased reporting of thrombosis events in drug eluting stents, compared with bare forms. J&J's Cordis subsidiary, which markets Cypher saw reported a 20 per cent drop in Q2 FY07 also, with sales of USD 852m.

Q2 FY07 approvals
On a brighter note, the EU Commission granted marketing authorisation for Invega, an atypical antipsychotic medication for the treatment of schizophrenia, while in the US, the FDA granted approval for an additional indication for Invega for long-term maintenance of schizophrenia.

In May 2007, the FDA also approved the use of Doxil (doxorubicin) in combination with Velcade (bortezomib) for injection to treat patients with multiple myeloma who have not previously received the drug and have received at least one prior therapy.

J&J filed new drug applications in both the US and the EU for ceftobiprole, an antibiotic for the treatment of complicated skin and skin structure infections. Doripenem, a carbapenem antibiotic, was filed in the same regions for the treatment of nosocomial pneumonia and in the EU for complicated urinary tract infections and complicated intra-abdominal infections.

Domestic sales were up 9.0 per cent, while international sales increased 18.4 per cent, reflecting operational growth of 13.0 per cent and a positive currency impact of 5.4 per cent. On a pro-forma basis, including the net impact of the acquisition of Pfizer Consumer Healthcare in both periods, worldwide sales increased 3.6 per cent operationally.

Net earnings and diluted earnings per share for Q2 FY07 were USD 3.1bn and USD 1.1bn, respectively. Q2 FY06 net earnings included an after-tax in-process R&D charge of USD 87m associated with the acquisition of Vascular Control Systems. Excluding this charge, net earnings for Q2 FY07 and diluted earnings per share represented increases of 6.0 per cent and 7.1 per cent, respectively, compared with the same period in 2006.

J&J reiterated its previous earnings guidance for FY07, which excludes the impact of in-process research and development charges or other special items, of between USD 4.02 and USD 4.07 per share. In July, J&J announced a USD 10bn share repurchase programme, which has no time limit and may be suspended or discontinued at any time.

William C Weldon, chairman and CEO of J&J said: "Our broadly-based approach to health care is serving us well as challenges in the marketplace intensify across certain businesses. We continue to grow earnings while successfully integrating acquisitions and continuing to invest in promising new growth opportunities."

J&J shares rose USD 0.20 to reach USD 64 in pre-market trading on 17 July.

18th July 2007


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