Johnson & Johnson Raises Guidance -- Update
19 July 2017 - 1:21AM
Dow Jones News
By Jonathan D. Rockoff and Anne Steele
Johnson & Johnson raised its sales and profit outlook for
the year even as the health-care giant's second-quarter revenue
declined amid steeper competition for some of its key drugs.
Chief Executive Alex Gorsky said the company expects sales and
earnings to accelerate in the second half of the year, as J&J
incorporates two key acquisitions and launches new products.
The New Brunswick, N.J., company now expects adjusted earnings
for the year of $7.12 to $7.22 a share, up from $7 to $7.15. And it
expects sales of $75.8 billion to $76.1 billion, up from $75.4
billion to $76.1 billion.
J&J is the world's largest health-products company and its
sales are considered a bellwether for the industry.
The company has been reshaping its pharmaceutical,
medical-device and consumer-health businesses to adapt to patent
expiries, pricing pressures and changing consumer preferences.
J&J's results have also been pressured by a stronger U.S.
dollar and weakness in some emerging markets.
Rheumatoid-arthritis drug Remicade, long the company's
top-selling product, has begun facing competition from lower-cost
"biosimilar" rivals that analysts expect will erode sales.
Remicade sales dropped 14% in the second quarter to $1.53
billion world-wide. Finance Chief Dominic Caruso said sales have
held up well against a biosimilar from Pfizer Inc., and that most
of the drop was due to a tough comparison in the previous year's
quarter, when J&J recorded a positive gain for rebates on
Remicade and other drugs.
J&J attributed a $342 million drop in its pharmaceutical
sales in the quarter to the same positive gain last year.
Sales of diabetes drug Invokana, another key J&J product,
plunged 23% to $295 million in the quarter. And sales of
prostate-cancer treatment Zytiga dropped 7.2% to $558 million as a
federal probe of charities that help patients pay for drugs chilled
financial support to help patients cover their out of pocket
costs.
Last month, J&J closed its largest deal ever, a $30 billion
acquisition of Swiss drug company Actelion. Mr. Gorsky said J&J
sees "great opportunities" to increase sales of Actelion drugs by
expanding their use to more patients and around the world.
J&J closed in February on its $4.3 billion purchase of
Abbott Laboratories' eye-surgery equipment business.
Analysts estimate newly-approved psoriasis drug Tremfya could
reach $6.4 billion in yearly sales world-wide, according to
Evaluate, a market-intelligence firm. A new rheumatoid-arthritis
drug, sirukumab, is estimated to notch $5.5 billion in world-wide
sales if approved.
Overall revenue in J&J's pharmaceutical business, the
company's largest, edged 0.2% lower to $8.64 billion, hurt by
foreign-currency challenges. J&J's medical-devices business
recorded a 4.9% increase in sales to $6.73 billion. Consumer-health
sales grew 1.7% to $3.48 billion.
In all for the quarter, J&J earned $3.83 billion, or $1.40 a
share, down from $4 billion, or $1.43 a share, in the same period a
year before.
Revenue rose 1.9% to $18.84 billion.
Excluding certain items, adjusted earnings were $1.83 a share.
Analysts had expected $1.80 in adjusted per-share profit on revenue
of $18.95 billion.
Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and
Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
July 18, 2017 11:06 ET (15:06 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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