Johnson & Johnson is dealing with a multibillion-dollar hit this year as generics and biosimilars eat away at sales. That's the bad news. The good? Its newer meds continue to deliver enough oomph to push up its top line.
The company’s immunology unit grew 10% in the third quarter, trailed by 9% growth for oncology and 8% for neuroscience. Altogether, J&J’s pharma group turned in 6.4% operational growth to $10.9 billion for the quarter, easily outpacing its other business units.
The performances come as J&J deals with copycat versions of prostate cancer med Zytiga and rheumatoid arthritis blockbuster Remicade, along with other recent patent losses. Previously, the company said generics and biosimilars would erode sales by $3 billion to $3.5 billion in 2019. But now, J&J expects the hit to be $2 billion, pharma chairman Jennifer Taubert said on a Tuesday conference call. The copies will keep digging into sales next year, she said.
On the flip side, 10 J&J drugs posted double-digit sales growth in the third quarter. Executives highlighted operational sales jumps of 31% for Stelara, 57% for Darzalex, 33% for Imbruvica, 70% for Tremfya and 95% for Erleada.
And there’s more ahead for Darzalex, Taubert said. The drug is already competing in second-line and later uses in multiple myeloma, but J&J now has an opportunity to move into frontline use. The med won approval for previously untreated patients ineligible for stem-cell transplant in June and in transplant-eligible patients in September.
J&J recently filed a subcutaneous version of Darzalex, which would take the dosing procedure from a multiple-hour infusion to a five-minute injection process. She said the more convenient formula would be an “important catalyst for growth,” especially in the outpatient setting.
On Xarelto, J&J execs said they were “pleased” to see the med hold its own during the third quarter after previous declines. The company has been working to get past sales hits from the Medicare donut hole and payer rebates, execs said. Plus, the drug on Monday scored its eighth approval, this time to help prevent blood clots in acutely ill patients without a high risk of bleeding, both during and after hospitalization.
With the third-quarter performance, J&J raised its 2019 sales guidance to $83.7 billion to $84.2 billion, up from a previous range of $82.4 billion to $83.2 billion. The new forecast translates to top-line growth of 2.5% to 3%. J&J’s shares were up 2% Tuesday morning after the company released earnings.
Also on Tuesday’s call, J&J CFO Joe Wolk addressed recent legal setbacks the company has faced. J&J expects an "egregious" $8 billion Risperdal verdict, leveled last week, to be reduced in appeals, Wolk said.
As for its load of opioid litigation, Wolk said J&J couldn’t reach a “reasonable” settlement in Oklahoma, and it will now appeal the $572 million verdict. In Ohio, by contrast, J&J was able to strike a deal Wolk called reasonable and the company was “particularly pleased” the money was set to benefit opioid addiction victims.
And on the thousands of talc lawsuits J&J's facing, the CFO said it's “probably the poster child for how big a business plaintiffs attorneys” have made suing life sciences companies such as J&J.
Overall, 50% of product liability cases are over life sciences products at a time when “products have never been safer,” he said. Wolk insists the science supports J&J and that plaintiffs attorneys are spending hundreds of millions of dollars on TV advertising to create a $36 billion litigation industry.