J&J hikes earnings forecast on pharma's superhero sales flight

Many a drugmaker CEO would love to unveil pharma sales like Johnson & Johnson's ($JNJ) in the third quarter. J&J's prescription drug revenue burgeoned by 9.9%, fueled by still-growing older meds like Remicade and newer debuts like the prostate cancer treatment Zytiga and blood thinner Xarelto. Total pharma sales for the period: $7 billion.

J&J CEO Alex Gorsky

And that strong performance prompted something not too often seen in the drug business these days: J&J hiked its earnings forecast, for the second time this year. "Our third-quarter results reflect the solid, demonstrable results in achieving our near-term priorities while also advancing our longer term strategic growth drivers," Chairman and CEO Alex Gorsky said in a statement. "Our key products and successful new product launches delivered strong growth."

Too bad Gorsky has to contend with a lagging medical devices and diagnostics business, whose sales fell short of analyst estimates. The company's consumer drug business--while not the disappointment it has been--still came in mostly flat. Overall, the company's sales were up 3% including currency effects.

In an early reaction to J&J's numbers, Leerink Swann analyst Danielle Antalffy credited the company's pharma division not only with giving sales some real oomph--but also for pushing earnings well above investor expectations. EPS came in at $1.36 versus consensus estimates of $1.32.

"Overall, J&J continues to ride the back of strong pharma performance as recent product launches continue to exceed expectations," Antalffy wrote in an investor note, adding, "[T]he company should continue to benefit from positive tailwinds within pharma and the ongoing consumer turnaround."

Speaking of the products graded at "exceeds expectations," Zytiga topped estimates by $55 million, with $464 million in sales, up from $265 million year-over-year. Xarelto beat expectations by $76 million, at $246 million--almost four times the size of last year's number. Remicade, the blockbuster anti-inflammatory remedy, also surpassed estimates, as did Stelara, the psoriasis treatment, which brought in $370 million. No big surprise to us; three of those four drugs made FiercePharma's recent ranking of the pharma industry's most successful drug launches.

While drugs were turning in strong sales, J&J continued to clean up problems in its consumer healthcare business--and deal with liability lawsuits on multiple fronts, plus contend with Justice Department prosecutors looking to penalize J&J for alleged off-label marketing.

- read the release from J&J
- see the product-sales details

Special Reports: Top 15 Drug Launch Superstars - Zytiga - Stelara - Xarelto | Top 10 Pharma Companies by 2012 Revenues - J&J

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