File this under Inevitable: In reporting its first-quarter earnings on Tuesday, Johnson & Johnson ($JNJ) revealed that its hepatitis C drug Olysio succumbed to U.S. competition. With Gilead Sciences' ($GILD) two-in-one pill Harvoni and AbbVie's ($ABBV) Viekira Pak now on the scene, the J&J drug saw sales drop by two-thirds--and it was one of J&J's biggest pharma-growth drivers last year.
And the Olysio numbers were just one of the disappointments J&J had to report for Q1. The biggest one? Currency effects on its numbers.
A big chunk of J&J's sales come from outside the U.S., and the strong dollar took a bigger-than-expected toll on sales and profits in Q1. For the quarter, companywide sales came in at $17.4 billion, with almost half from international markets. That's down by 4.1% year over year. Earnings fell by 4.3%. And both would have grown without the currency hit.
With the writing on the wall, J&J cut its 2015 earnings forecast to $6.04 per share to $6.19 per share.
Without the foreign-exchange downer, J&J's sales would have risen by 3.1%, led by its pharma growth. Prescription drug revenue swelled to $7.73 billion, a 10% operational increase, with a whopping 16.9% hike in U.S. sales.
So, while Olysio took a major hit in the U.S.--sales there came in at $98 million, down from $291 million--J&J's other new products more than took up the slack. The psoriasis drug Stelara was up by one-fifth to $549 million, even factoring in the currency hit. And the long-acting antipsychotic Invega Sustenna was up 10% to $411 million. The clot fighter Xarelto, up almost 40% to $441 million.
And J&J's newest meds delivered some impressive numbers, too. The treatment Invokana saw sales almost triple to $278 million worldwide, with all but a fraction of its sales in the U.S. Imbruvica--the blood cancer treatment in the spotlight since AbbVie agreed to buy J&J partner Pharmacyclics ($PCYC)--delivered $116 million, up from $10 million for the same quarter last year.
Consumer health eked out some growth, but that's before the currency hit. Worldwide, sales were down by almost 5%, to $3.4 billion. In the U.S., consumer sales grew slightly, mostly because of increases in OTC drug sales and baby care products. In devices, overall sales were down, thanks to the sale of J&J's Ortho Clinical Diagnostics unit; currency effects wiped out growth in other business lines.
- see the release from J&J
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