J&J plots $10B buyback as plummeting hep C sales tarnish Q3

Johnson and Johnson's ($JNJ) top line didn't look so hot in Q3, and once again, the company has the ultracompetitive hepatitis C field to blame.

Sales totaled $17.1 billion for the quarter--a 7.4% slip from where they were this time last year, the company said Tuesday, with most of the drop on currency effects. The pharma unit, which has been cruising along to pick up the slack in the drugmaker's other units, saw sales slide even when backing out the negative effects of a strong dollar.

It wasn't hard for the company to pinpoint the culprit. Sales of hep C med Olysio, last year a high flyer, took a 96.1% tumble in the U.S.--hitting only $26 million for the quarter compared with last year's $671 million--and a 90.1% dive worldwide.

Of course, last year's third quarter finished before Gilead's ($GILD) hep C-fighting combo med, Harvoni, won approval. That drug has since grabbed the "Best Launch Ever" title--and if that wasn't enough to spoil Olysio's party, AbbVie ($ABBV) followed up with a launch for its own combo competitor, Viekira Pak.

Of course, J&J--which boasts a lineup of several fast-growing new drugs--did have its sales success stories, led by diabetes med Invokana, cancer meds Imbruvica and Zytiga, and anticoagulant Xarelto. Invokana sales jumped 90.5% from last year's Q3 mark, while Xarelto posted growth of 11.4%. Zytiga sales rose 6.1%, with currency effects aside. Drugs including rheumatoid arthritis med Simponi and psoriasis remedy Stelara continued to kick in, too, adding sales improvements of 26.7% and 12.9%, respectively.

Johnson & Johnson CEO Alex Gorsky

Still, the company made moves to placate investors, announcing that it would repurchase up to $10 billion of its shares--a program it'll fund via debt.

"We are pleased that Johnson & Johnson's strong balance sheet and cash flow enable us to simultaneously return value to shareholders through our regular quarterly dividend and share repurchases, while at the same time continuing to invest in internal and external opportunities that will further strengthen our robust enterprise pipeline and drive long-term growth," CEO Alex Gorsky said in a statement.

- read the earnings release
- read the buyback release

Special Reports: Top 15 pharma companies by 2014 revenue - J&J | Top 20 highest-paid biopharma CEOs - Alex Gorsky, J&J

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