Johnson & Johnson reported slightly better-than-expected third-quarter profit and raised its full-year forecast on Tuesday as increased demand for cancer drugs and immune-disorder treatments powered strong results for its pharmaceutical unit.
Shares of the health-care conglomerate were up 2.3 per cent at US$137 in morning trading after it raised its adjusted 2018 earnings forecast to a range of US$8.13 to US$8.18 a share from a prior view of US$8.07 to US$8.17.
Solid prescription-drug sales helped offset continued disappointment in the medical devices segment. Executives on a conference call said that business would start to grow in-line or better than the market by 2020.
“We are not satisfied with the performance in medical devices,” chief financial officer Joseph Wolk said after the unit’s quarterly sales missed Wall Street estimates.
Pricing pressure has effected all categories in orthopedics, the company said, adding that it will consider both transformative acquisitions and smaller, tuck-in deals to support the business.
The company has been selling off certain businesses, such as diabetes-care devices, to focus on better performing units and development of new products.
Overall sales rose 3.6 per cent to US$20.35-billion in the quarter, exceeding analysts’ average estimate of US$20.05-billion, according to Refinitiv data.
Pharmaceuticals sale rose 6.7 per cent to US$10.35-billion, fuelled by double-digit sales growth for prostate cancer drug Zytiga and Stelara for Chrohn’s disease and psoriasis
Zytiga sales surged 43 per cent to US$958-million, blowing past the consensus estimate of US$795-million, according to Barclays. Stelara sales jumped 16.5 per cent to US$1.31-billion, above expectations of about US$1.27-billion.
Sales of rheumatoid arthritis drug Remicade fell 16.3 per cent to US$1.38-billion owing to increasing competition from cheaper, biosimilar versions.
Newer blood cancer drug Darzalex brought in sales of US$498-million, falling short of lofty Wall Street estimates of about US$510-million.
Medical device sales were down 0.2 per cent at US$6.59-billion, while consumer products sales rose 1.8 per cent to US$3.42-billion, helped by the U.S. relaunch of the Johnson’s baby brand.
Excluding items, the company earned US$2.05 a share, edging past analysts’ average forecasts by 2 cents.
Mr. Wolk said on Tuesday that while J&J was supportive of more transparency in drug pricing, the company does not believe a Trump administration proposal for requiring the list price of medicines at the end of television ads would be helpful.
He said including those prices in commercials could be somewhat confusing and “act as a deterrent to good responsible health care.”