Market reaction to Johnson & Johnson’s earnings announcement reflects an overall worry about cost-cutting versus sales growth. Yes, J&J beat expectations, posting earnings of $1.20 per share, about 7 cents higher than analysts had estimated. But third-quarters sales came in at $15.1 billion, which fell short of those same estimates. At press time, the stock had fallen 2.62 percent, or $1.64, to $60.89. ”I think people would have been happier if the revenue was stronger and the beat on the bottom line was less,” Noble Financial Group analyst Jan Wald told Reuters.

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It wasn’t just analyst expectations that J&J’s sales failed to beat, either. That $15.1 billion represented a 5.3 percent decline from the third quarter of last year. And in further evidence of the relative weakness of U.S. drug markets versus the rest of the world, domestic sales dropped by 8.1 percent, while international sales would have grown 2.4 percent without the drag of currency effects.

Looking at J&J’s pharma division alone, the drop is even more marked. Worldwide drug sales amounted to $5.3 billion, down 14.1 percent year-over-year, including a negative 2.2 percentage-point currency hit. Domestic sales dropped a whopping 19.2 percent, as blockbuster drugs Topamax (down 88 percent in the U.S.) and Risperdal (down 71 percent) fell off the patent cliff.

Bright spots? Remicade, which grew by 5.7 percent in the U.S. and 5.9 percent worldwide, to $1.036 billion for the quarter. Risperdal Consta, the long-acting form of the now-generic antipsychotic, grew by 9.3 percent in the U.S. and 4.4 percent globally, to $353 million. And the company did get the FDA OK for its “new Remicade,” the anti-inflammatory Stelara. So there’s hope for next quarter.

Source: FiercePharma

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Johnson & Johnson reported Tuesday that second-quarter sales of prescription drugs dropped 13.3 percent to $5.5 billion compared to the prior-year period, due to generic competition and the negative impact of currency exchange. The result was better than analysts projected, and net income, which decreased 3.6 percent to $3.2 billion versus the same time last year, also exceeded consensus estimates.

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Analyst Jan Wald of Noble Financial Group remarked that “the pharmaceutical business looked especially strong to us,” noting that Johnson & Johnson’s revenue for Remicade rose to $1.1 billion, up 24.4 percent from the year-ago period. Sales for Risperdal Consta were up 1.5 percent to $348 million, while the company recorded a 13.6-percent rise in Concerta sales to $317 million.

Combined sales for Procrit/Eprex were down 11.5 percent to $577 million on continued safety concerns over these and other anaemia drugs, but the decline was less than initially feared, Wald remarked. Meanwhile, generic competition eroded sales of Risperdal and Topamax, which fell 66 percent and 73 percent, respectively, to $239 million and $182 million, compared with the corresponding period in 2008.

Overall revenue for the three months ending June 30 was down 7.4 percent to $15.2 billion, but came in $190 million higher than some analysts had speculated. Looking ahead, Johnson & Johnson reiterated its per-share earnings outlook of $4.45 to $4.55 for the year, excluding one-time items.

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Commenting on the news, Joel Levington of Hyperion Brookfield Asset Management, said Johnson & Johnson “did an excellent job of managing its costs to help offset declines in mature pharma products…The company’s balance sheet strength will provide it opportunities to continue making select acquisitions.”

Source: FirstWord

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