Oncology drugs drive Q4 growth in Johnson & Johnson's prescription medicine unit, but fall short of estimates

Headline results for the fourth quarter:

Prescription drug sales

$10.5 billion (forecasts of $10.6 billion)

+3.5%

Overall revenue

$20.7 billion (forecasts of $20.8 billion)

+1.7%

Profit

$4 billion

+31.8%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"We delivered strong underlying sales and earnings growth in 2019, driven by the strength of our pharmaceutical business," remarked CEO Alex Gorsky. The company, which is battling multiple lawsuits, from claims that it helped fuel the US opioid epidemic to allegations it downplayed risks tied to Risperdal, noted that litigation expenses during the quarter fell to $264 million, compared with nearly $1.3 billion a year ago.

Other results:

  • US pharmaceutical revenue: $6.2 billion, up 3.9%
  • International pharmaceutical revenue: $4.4 billion, up 2.9%
  • Immunology product sales: $3.5 billion, up 5.4%
    • Stelara: $1.7 billion, up 17.7%, driven by strong uptake in Crohn's disease, but below analyst forecasts of about $1.8 billion
    • Remicade: $1 billion, down 16.4%, hit by increased discounts/rebates and biosimilar competition
    • Simponi/Simponi Aria: $515 million, up 6.6%
    • Tremfya: $270 million, up 53.9%, with strong uptake in psoriasis
  • Oncology product sales: $2.7 billion, up 9.1%
    • Imbruvica: $875 million, up 24.5%, mainly driven by use in front-line chronic lymphocytic leukaemia, but falling short of analyst estimates of $907 million
    • Darzalex: $830 million, up 42.1%, with strong market growth and share gains in the US and EU, driven by patient uptake in all lines of therapy
    • Zytiga: $677 million, down 13.8%, with US sales hit by generic competition
  • Invega Sustenna/Xeplion/Invega Trinza/Trevicta: $871 million, up 14.2%
  • Pulmonary hypertension products (Opsumit, Tracleer and Uptravi): $623 million, down 6.7%, with lower sales of Tracleer due to generic competition and "cannibalisation from Opsumit"
  • Xarelto: $609 million, up 0.4%, with volume and market growth offset by higher patient access costs as a result of increased use in Medicare, higher "donut hole" utilisation and legislative rebate change
  • Prezista/Prezcobix/Rezolsta/Symtuza: $544 million, up 9.9%,
  • Full-year sales: $82.1 billion, up 0.6%
  • Full-year profit: $15.1 billion, down 1.2%

Looking ahead:

Johnson & Johnson expects earnings per share this year of between $8.95 and $9.10, with sales in the range of $85.4 billion to $86.2 billion, representing growth of 4% to 5%. Analysts predict that revenue in 2020 will be around $85.5 billion.

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