J&J upbeat on future despite threat to sales of key drug

Johnson & Johnson reported a better-than-expected quarterly profit on Tuesday, and said its phamaceutical business would keep prospering despite the threatened launch of a competitor for its blockbuster Remicade arthritis drug.

Pfizer late on Monday said it would begin US shipments of Inflectra, its biosimilar form of Remicade, by late November at a 15 per cent discount to J&J's current wholesale prices. With annual US sales of about $5 billion (€4.55bn), Remicade is J&J's biggest product.

Biosimilar drugs are close copies intended to provide savings compared with costly branded products. Inflectra is already available in Europe.

"We are confident our pharma business will go well with or without [the] biosimilar launch," J&J chief financial officer Dominic Caruso said Tuesday in an interview on CNBC.

J&J is appealing an August federal court decision that invalidated a US Remicade patent, setting the stage for a February court battle with Pfizer. Should Pfizer launch Inflectra and later lose the court fight, that could entitle J&J to triple damages. “We will continue the appeal process, and feel very good about it,” Mr Caruso told CNBC.

Strong growth

In the third quarter J&J revenue rose to $17.82 billion (€16.21bn) from $17.10 billion (€15.55bn) a year earlier. Its pharmaceutical sales jumped 9.2 per cent to $8.4 billion, with strong growth for its Imbruvica and Darzalex cancer drugs and its blood thinner Xarelto. US sales of Remicade jumped 9.4 per cent to $1.22 billion.

Global medical device sales rose 1.1 per cent to $6.16 billion in the quarter, while consumer product sales fell 1.6 per cent to $3.26 billion.

J&J raised the lower end of its full-year 2016 profit forecast to $6.68 per share, from $6.63 a share. It retained the upper end at $6.73 per share.

The company’s net earnings rose to $4.27 billion, or $1.53 per share, in the third quarter, from $3.36 billion, or $1.20 per share, a year earlier. Excluding special items, J&J earned $1.68 per share.

Analysts on average had expected a profit of $1.66 per share and revenue of $17.74 billion.

Up to Monday's close, J&J's shares had gained about 15 per cent since the start of the year, compared with a 3.7 per cent decline in the S&P 500 healthcare sector. – Reuters