Fighting for market share, J&J expects last year's copycat pain to 'bleed into 2020'

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Johnson & Johnson turned in global sales of $82.1 billion in 2019, up 0.6% versus 2018. (J&J)

Amid launches and fierce fights for share in key markets, several Johnson & Johnson meds scored some wins against generic and biosimilar competition last year. But now that it's 2020, that success is proving to be a double-edged sword.

“As we sat here last year, we would’ve expected a bigger impact from [losses of exclusivity],” J&J’s chief financial Joe Wolk said on Wednesday’s fourth-quarter 2019 conference call.  

As Wolk told analysts, based on doctors’ comfort with J&J’s meds, data, supporting them, patient experience and other factors, the company’s products were able to “retain business a little bit longer” in the face of copycat competition. Now, though, that generic erosion will “bleed into 2020," Wolk said.

Copycats are weighing on prostate cancer med Zytiga, multiple myeloma med Velcade and immunology blockbuster Remicade, for three. J&J’s international Velcade sales fell 33% to $751 million last year, while Zytiga's global sales dropped 20% to $2.8 billion. Remicade, which has faced years of competition, fell 18% to $4.38 billion. All three are likely to suffer again in 2020.

Remicade's ability to cling to market share relies partly on J&J’s staunch defense. Ahead of biosimilar launches, an exec said the company would develop “innovative contracts” to “utilize the full breadth” of its portfolio, and the success of those contracts later drew fire from inside and outside the pharma world.

After Pfizer's biosim struggled to gain traction, the company sued J&J, claiming the Remicade maker had used exclusionary contracts with supply-chain players to block new competition. J&J argued that Pfizer's own offers weren't good enough to win business. The FTC last year started investigating J&J's Remicade tactics.

RELATED: With its Remicade biosimilar stymied by the brand, Pfizer sues Johnson & Johnson for 'anticompetitive' dealmaking 

Sales for another J&J med facing biosimilar competition, Procrit, fell 20% last year to $790 million.

But even with those meds losing ground in 2019, strong growth for Stelara—now J&J's top med by sales—plus Tremfya, Darzalex and Imbruvica pushed the company’s overall pharma sales to $42.2 billion, an increase of 5.6% on an operational basis. Including currency effects, the pharma group grew by 3.6%.

J&J's newer meds, plus some upcoming launches, are expected to deliver more in 2020. The drugmaker is early in its rollouts for depression spray Spravato and cancer med Balversa, plus it’s submitting applications for new uses for Stelara, Darzalex, Erleada and other drugs, J&J CEO Alex Gorsky said on Wednesday’s call. Some of those new uses carry potential peak sales of $500 million or more, he added.

Pharma again outperformed other divisions—medical devices and consumer health—at the global healthcare giant. All together, J&J turned in 2019 sales of $82.1 billion, up 0.6% against 2018 on a reported basis. At constant currencies, the company turned in 2.8% sales growth.

In 2020, J&J expects sales of $85.8 billion to $86.6 billion, leaving aside currency effects. That would amount to growth of between 5% and 6%. 

RELATED: The top 15 pharma companies by 2018 revenue - Johnson & Johnson 

Aside from ongoing losses of exclusivity, J&J execs cited some other challenges for 2020 on Wednesday's call. J&J is operating in a “litigious environment,” Gorsky said, alluding to lawsuits over opioids, talc and more. Plus, there’s uncertainty in the U.S. healthcare debate right now, and the company has yet to finalize its proposed opioid settlement. The company is “cautiously optimistic” about reaching a deal, execs said.

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