Johnson & Johnson's pharma unit is still churning out growth, partly because of outperforming new launches like cancer med Darzalex. But execs had to explain away some disappointing results for two of its older blockbusters.
Prostate cancer med Zytiga, which executives last year predicted wouldn’t face 2018 generic competition, is losing ground to cheap copycats, while growth engine Xarelto faces a steamrolling rival in Pfizer and Bristol-Myers Squibb's Eliquis.
U.S. Zytiga sales slipped 59% in the second quarter to $198 million thanks to an onslaught of generics, while anticoagulant Xarelto posted a 19% decrease in stateside sales to $549 million. On Tuesday’s conference call, Vice Chairman Joaquin Duato said several factors hurt Xarelto’s performance in the second quarter.
More of Xarelto's scripts came from Medicare Part D patients in Q2 of this year compared with last, according to J&J's earnings presentation. And J&J was on the hook for a bigger share of patient costs in Medicare Part D’s donut hole. Congress implemented the donut hole change last year, forcing drugmakers to pay more to move patients out of the coverage gap.
Once J&J gets a few quarters ahead of those changes, Xarelto should start turning in more impressive growth percentages, Duato said. How? J&J plans to grow Xarelto’s market share and volume in existing uses, plus focus on launches in new indications, Duato said, though he didn't specify exactly how it'll pump up that volume.
Bristol-Myers Squibb and Pfizer's rival drug Eliquis is surely facing some of the same issues—the donut hole provision, for instance—but its sales look much healthier. While BMS hasn't yet released second-quarter results, it did report a 36% boost to U.S. Eliquis sales in the first quarter, to $1.2 billion. For comparison, J&J's Xarelto posted a 6.3% decrease to $542 million for the same period in the U.S.
On J&J's Zytiga, Duato made similar promises. Once the drugmaker gets past the anniversary of its generics debut, quarter-over-quarter comparisons will look better, he said. Outside of the U.S., Zytiga sales are still on the upswing.
But it was in April last year that J&J executives confidently predicted the company wouldn’t see Zytiga generics in 2018. Then, in the fourth quarter, generics launched and took an early bite out of Zytiga’s sales. Now, the med is a drag on the pharma unit, rather than a boost.
Still, the company's pharma business has a lot to be enthusiastic about. J&J has nine drugs growing by double-digit percentages, execs said Tuesday. The company continues to move past the Remicade loss of exclusivity and has new depression drug Spravato in very early launch stages.
On a reported basis, the company’s oncology group grew the most in the second quarter, leaping 9.8% to $2.7 billion. Worldwide, Imbruvica sales jumped 34% to $830 million. Immunology med Stelara had a blockbuster quarter, growing sales 16.1% worldwide to $1.56 billion.
And J&J figures the upswing will continue. Despite numerous patent losses facing its pharma business, J&J executives have said the company is set to achieve "above-market growth" through 2021 thanks to a suite of new drugs and label expansions.
The drugmaker is the first to report in the second quarter of 2019, so it remains to be seen how the rest of the industry performed. But J&J's overall pharma results for the period won't likely set any records among its peers. The company's pharma outfit grew sales 1.7% on a reported basis and 4.4% operationally for the quarter.
For the first half of the year, J&J's pharma sales were up 2.8% on a reported basis and up 6.1% operationally to $20.77 billion.