Johnson & Johnson's 2nd-Qtr Profit Rises
11% on Increased Drug Sales
Bloomberg News
July 14, 1998, 10:46 a.m. ET
J&J 2nd-Qtr Profit Rises 11% on Procrit, Other Drugs (Update1)
(Adds percentage increase in U.S. drug sales in 6th
paragraph, stock price in 5th paragraph.)
New Brunswick, New Jersey, July 14 (Bloomberg) -- Johnson &
Johnson said its second-quarter profit rose 11 percent as sales
of prescription drugs increased, including its anemia treatment
Procrit and schizophrenia medicine Risperdal.
Net income rose to $1.01 billion, or 74 cents a diluted
share, from $909 million, or 67 cents, a year earlier. Sales for
Johnson & Johnson, which also makes Band-Aids and Tylenol
painkillers, rose 1.5 percent to $5.78 billion from $5.7 billion.
Johnson & Johnson is relying more on drugs to boost profit
as competition stiffens for stents, devices used to prop open
clogged arteries after they have been surgically cleared. The
world's fifth-largest drugmaker had setbacks at its
pharmaceutical unit in the quarter, though, including new
warnings about its heartburn drug Propulsid.
''These are very difficult times for J&J,'' said Neil Sweig,
an analyst with Southeast Research Partners, who has a ''hold''
on the company's stock. ''This is a very resourceful, very large
company but they've got to get through a few problem quarters.''
Second-quarter results matched the 74-cent average estimate
of analysts polled by IBES International Inc. New Brunswick, New
Jersey-based Johnson & Johnson's shares rose 1 7/16 to 73 1/4 in
midmorning trading. The stock has gained 16 percent in the past
year, lagging the 33 percent return of the Standard & Poor's
Health Care Diversified Index.
Worldwide pharmaceutical sales rose 12 percent to $2.2
billion in the quarter. Johnson & Johnson said U.S. drug sales
rose 26 percent. Along with Risperdal and Procrit, Johnson &
Johnson said it had strong growth in sales of the antibiotic
Levaquin.
At the same time, worldwide sales of medical devices,
including stents, fell 4.7 percent to $2.1 billion. Sales of
consumer products such as Band-Aids fell 2.5 percent to $1.6
billion.
In June, the U.S. Food and Drug Administration said Johnson
& Johnson's Propulsid should be prescribed only after other
treatments fail because it can cause severe health problems. In
May, an FDA advisory panel voted unanimously against Ergo Science
Corp.'s diabetes drug, Ergoset, which Johnson & Johnson had
agreed to market.
Johnson & Johnson also stopped development of a drug to
treat strokes after it reached the last of the three stages of
testing required for FDA approval.
During the quarter, rival Pfizer Inc. agreed to sell part of
its medical-device business to Boston Scientific Corp. for $2.1
billion. Boston Scientific, which sells only devices, is likely
to be a more formidable competitor than Pfizer was, Sweig said.
''It's not going to get better (for J&J) so quickly,'' he
said.
Johnson & Johnson was founded in 1886 to make surgical
dressings. It introduced the Band-Aid in 1921 and started sales
of Tylenol as an over-the-counter medicine in 1960.
--Kerry Dooley in the Princeton newsroom (609) 279-4016/dd/bab |
