Johnson & Johnson ($JNJ) is always the first Big Pharma to roll out quarterly results. So, investors and analysts watch J&J's numbers for hints about the rest of the industry. But these days, J&J is more of an anomaly than a leading indicator. Why? Its drug sales are growing--big time.
Reporting on its second quarter Tuesday, J&J unveiled $19.5 billion in total sales, an increase of 9.4%, excluding currency effects. But prescription drug sales are its most impressive line item: $8.5 billion, up by 21%. That surge prompted J&J to hike its full-year earnings forecast to $5.85 to $5.92 per share.
Thing is, J&J has pulled off the patent-cliff switch. During the worst of the industry's patent expirations--including its own on the antipsychotic blockbuster Risperdal--the U.S.-based company managed to roll out one new drug after another. And those drugs have grown quickly, lifting J&J above those exclusivity losses. Each of its competitors would have loved to do the same thing.
Its latest big roll-out, the hepatitis C fighter Olysio, hit the market at a roar in November. On the leading edge of a new generation of treatments for the disease, its results might be overshadowed by those of its bigger rival, Gilead Sciences' ($GILD) Sovaldi, but they're impressive nonetheless. Sales hit $831 million for the quarter, and it's already entered blockbuster territory for the year, with $1.2 billion in sales so far.
The prostate cancer drug Zytiga, growing lickety-split since its 2011 FDA approval, posted another 42.3% hike in global sales for Q2, to $562 million. That's more than $1 billion for the year so far.
Xarelto, the clot-fighter J&J developed with Bayer, almost doubled sales during the quarter, to $361 million. It's already leading the market for new prescriptions in its class, despite its debut many months after first-to-market Pradaxa, from Boehringer Ingelheim.
J&J also credited a couple of its newest meds for lifting pharma sales, though the company didn't break out actual sales figures for either of them: the diabetes treatment Invokana, a first-in-class SGLT2 inhibitor, and the blood cancer treatment Imbruvica. The anti-inflammatory drugs Simponi (for rheumatoid arthritis and several other autoimmune disorders) and Stelara (psoriasis) both delivered, with 61% and 42% increases. Simponi brought in $282 million, and Stelara, $528 million.
The company's consumer health unit is continuing to rebound from a long spell in the doldrums; after a series of OTC drug recalls, J&J struggled to return those brands to store shelves. They're getting there. The unit pulled out a 2.3% sales hike for the period. Its devices unit eked out a sales increase, too. But pharma is J&J's big growth driver, no question.
On the not-so-positive end of things, J&J is still facing liability suits, including a raft of problems related to its pelvic mesh devices. Accrual for litigation contributed to a $400 million charge against earnings for the quarter.
- see the release from J&J
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