With recent acquisitions and new product approvals expected to boost sales, health care products giant Johnson & Johnson has raised its financial forecasts for the year, despite a dip in second-quarter profit. The higher forecast pleased Wall Street, pushing shares up $1.51, or 1.1 percent, to $133.60 in premarket trading.
Its biggest acquisition ever, the $30 billion purchase of Swiss biopharmaceutical company Actelion, was completed on June 16, bringing J&J multiple new prescription medicines to sell. Last week, the Food and Drug Administration approved Tremfya, an injected drug for the painful skin condition psoriasis that expands the company’s key franchise of treatments for immune system disorders.
The first full quarter of sales from its acquisition of Abbott Medical Optics pushed up sales 5.1 percent for J&J’s medical devices business, which began restructuring begun a year ago to improve its results. Meanwhile, other minor acquisitions and approval of the company’s surging multiple myeloma drug to treat additional patients should also add to future revenue.
Still, higher spending on marketing, production and research pushed down Johnson & Johnson’s second-quarter profit 4.3 percent.
The maker of blood thinner Xarelto, Tylenol and other pain relievers, and medical devices on Tuesday reported net income of $3.83 billion, or $1.40 per share, down from $4 billion, or $1.43 per share, a year earlier.
Adjusted results, excluding one-time charges, amounted to $5 billion, or $1.83 per share, 4 cents better than Wall Street analysts expected. Revenue was $18.84 billion, just shy of analyst expectations for $18.89 billion.
“We are optimistic that the investments we are making will accelerate our sales growth in the second half of this year,” CEO Alex Gorsky said in a statement. “The Actelion acquisition establishes a new therapeutic area as well as another engine for growth.”
J&J, based in New Brunswick, New Jersey, gained Actelion’s three drugs for treating high blood pressure in the lungs, other marketed products and some experimental drugs in late-stage testing.
The company’s prescription drugs business, its largest segment, saw sales dip 0.2 percent to $8.64 billion, while sales of consumer health products such as Johnson’s baby care items edged up 1.7 percent to $3.48 billion. Meanwhile, sales of medical devices and diagnostic products climbed 4.9 percent to $6.73 billion, indicating the restructuring is turning around problems in the segment.
J&J said it now expects full-year earnings in the range of $7.12 to $7.22 per share, up from it April forecast of $7 to $7.15 per share. It forecast revenue in the range of $75.8 billion to $76.1 billion, up from $75.4 billion to $76.1 billion.
(Source: Associated Press)
Filed Under: Drug Discovery