Johnson & Johnson (JNJ) is among the world’s leading health care companies, with large positions in medical equipment, pharmaceuticals, and over the counter medications. It, like most large pharmaceutical companies, had entered a period of limited growth as an entire generation of blockbuster drugs has been losing patent protection, and new medications are a long ways from replacing that lost revenue.
In the past few years, Johnson & Johnson has lost, or is about to lost patent protection for Risperdal, Topamax, Levaquin, and Concerta. At its 2007 peak, Risperdal sold about $4.5 billion for Johnson & Johnson. Risperdal has also been at the heart of over $3.5 in judgments and settlements based upon the company promoting the drug for uses not authorized by the FDA. Topamax had sales of about $2.4 billion the year before it lost patent protection, and had also been marketed beyond the FDA authority Concerta, with annual sales of $1.3 billion, lost patent coverage in 2010, and Levaquin, with sales of about $1.4 billion, also competes against generic equivalents. These medications accounted for about 30% of Johnson & Johnson’s peak pharmaceutical sales year, 2008.
In Johnson & Johnson’s third quarter of 2012, revenues came to $17.1 billion, higher than I was expecting. It was 6.5% above the same quarter of 2011, and if currency values had remained steady, revenue would have increased nearly 11%. Profits came to a GAAP $3.0 billion, or $1.05 per share Excluding certain one-time costs and adjusted profits came to $3.5 billion, or $1.25 per share. Year ago adjusted earnings were $3.4 billion, or $1.24 per share. To continue reading, click here.