Johnson & Johnson cuts profit forecast

Johnson & Johnson (J&J), which has been subject to a spate of recalls of over-the-counter (OTC) medicines marketed by its McNeil division has said that it has been forced to cut its 2010 profit forecast and that revenues for the second quarter were essentially flat.

However, the company reported a 7.5 per cent year-on-year increase in second-quarter net income, due mainly to a change in its tax rate. 

J&J's net income for the quarter was $3.45bn, or $1.23 per share, up from $3.21bn, or $1.15 per share in the second quarter of last year. Worldwide consumer sales dropped by 5.4 per cent to $3.65bn for the quarter, and pharma sales were nearly flat at $5.5bn. Devices and diagnostics were up by four per cent.

J&J cut its 2010 forecast by 15 cents a share to $4 per share due to the McNeil recalls and the negative effects of currency exchange rates. The company said that a number of lawsuits have been filed against it as a result of the recalls and that it has received a grand jury subpoena from the US Attorney's Office in Philadelphia regarding the matter.

"Remedial actions to address the product quality issues at McNeil Consumer Healthcare are ongoing and of high importance," said William C Weldon, chairman and CEO at McNeil. "At the same time, we continue to make significant investments in acquisitions, strategic partnerships and in advancing our pipeline, positioning us well for future growth."

The 1 per cent sales growth in pharma products reflected strong performances by three newly launched products: the plaque psoriasis drug Stelara (ustekinumab), the rheumatoid arthritis drug Simponi (golimumab), and the extended-release schizophrenia drug Invega Sustenna (paliperidone palmitate). The HIV drug Prezista (darunavir), the multiple myeloma treatment Velcade (bortezomib) and the long-acting antipsychotic Risperdal (risperidone) also performed well, according to the company.

However, the migraine and epilepsy drug Topamax (topiramate) and the original version of Risperdal both suffered as a result of generic competition.