Last year as Alex Gorsky was preparing to take the top job at Johnson & Johnson ($JNJ), he pledged that the company under his command would get its troubled OTC manufacturing plants in shape and return the consumer health business to a growing top line. In its first-quarter earnings confab, J&J got to make good on those pledges.
During a call with analysts last week CFO Dominic Caruso said the OTC business in the U.S. was up more than 14% in the first quarter, helped by demand because of what he called a "healthy" cold and flu season. It was also boosted by the fact that the company has more products on the shelves. According to a transcript from Seeking Alpha, Caruso said J&J has been ramping up production and expects to have 75% of its OTC brands back in stores by the end of this year. He said J&J will do whatever it needs to do to promote them to regain the market share lost as manufacturing problems left consumers searching elsewhere for alternatives.
In January, as the flu season was raging, some drugstore chains like CVS still could not get enough J&J products to stock all stores and so combined them in certain stores and directed consumers there if they wanted J&J products.
In 2011, J&J's McNeil Consumer Healthcare signed the FDA consent decree after two years in which it recalled tens of millions of consumer products, including its popular Tylenol and Motrin products, which were manufactured at three plants. J&J closed and is gutting its Fort Washington facility and has said it will invest more than $100 million to retool it. Improvements are also being made at plants in Lancaster, PA, and Las Piedras, Puerto Rico. The problems have cost J&J billions of dollars in lost sales and improvement expenses.
- here's the Seeking Alpha transcript