Delivering sustainable growth
J&J emerged from a transitional 2012 continuing to generate annual sales increases and make significant advances on multiple fronts; the company is building out strategic platforms and establishing new ones.
by Andrew Humphreys firstname.lastname@example.org
Johnson & Johnson constitutes the broadest base of health-care businesses on a global scale. Seventy percent of the company’s revenue stems from No. 1 or No. 2 worldwide leadership positions in its respective markets. An annually consistent performance has allowed J&J to deliver an exceptional track record of growth that few, if any, companies can claim: 29 consecutive years of adjusted earnings increases and 51 consecutive years of dividend increases. J&J is one of just six companies in the Standard & Poor’s 100 Index to attain that performance. During the past 10 years, the company’s stock produced a 5.5 percent total return for investors versus a 7.1 percent total return for the S&P 500.
Johnson & Johnson is one of the world’s leading health-care entities. With headquarters in New Brunswick, N.J., J&J operates as a holding company for more than 275 operating companies in 60-plus countries. Amongst the J&J family member are the world’s sixth-largest consumer health company; the world’s largest and most diverse medical devices and diagnostics player; the world’s fifth-largest biologics entity; and the world’s eighth-largest pharma company.
Incorporated during 1887, J&J has about 128,000 employees engaged in the R&D, manufacture, and sale of a diverse array of products in the health-care arena. Leading the helm is Alex Gorsky, only the seventh CEO in J&J’s history. The company consists of three business segments: Pharmaceutical, Medical Devices and Diagnostics, and Consumer.
The Pharmaceutical business includes products in areas such as anti-infective, antipsychotic, contraceptive, gastrointestinal, hematology, immunology, infectious diseases, neurology, oncology, pain management, thrombosis and vaccines. The Medical Devices and Diagnostics segment includes a diverse range of products used to treat cardiovascular disease; orthopedic and neurological products; blood glucose monitoring and insulin delivery products; general surgery, biosurgical, and energy products; professional diagnostic products; infection prevention products; and disposable contact lenses. The Consumer business covers a wide range of products used in the baby care, skin care, oral care, wound care and women’s health-care areas, as well as nutritional and OTC pharma products, and wellness and prevention platforms.
The Pharmaceuticals segment continues to make significant investments in building strategic partnerships and advancing the pipeline, positioning the business for sustainable growth in 2013 and beyond. The continued integration of Synthes – the largest acquisition in J&J’s history – with DePuy has created the largest, most comprehensive orthopedics and neurologics business globally. J&J is returning a consistent supply of key consumer products to the market throughout 2013 to help restore balance in that segment.
J&J manages within a strategic framework geared toward generating sustainable growth. To accomplish this, management operates the business consistent with particular strategic principles that have proven successful over time. To this end, J&J participates in growth areas in human health care and is dedicated to attaining leadership positions in these growth areas via the development of high-quality, innovative products and services. New products introduced during the past five years represented 25 percent of the company’s 2012 sales. During 2012, $7.7 billion – 11.4 percent of sales – was invested in R&D.
According to J&J, this investment reflects management’s dedication to the significance of continuing development of new and differentiated products and services to sustain long-term growth.
Johnson & Johnson views its principle of decentralized management as an asset and fundamental to the success of a broadly based business. The company fosters an entrepreneurial spirit, uniting the extensive resources of a large organization with the ability to anticipate and react quickly to local market changes and challenges, its leaders say. J&J is committed to developing worldwide business leaders who can attain growth objectives. According to executives, J&J businesses are managed for the long term to sustain leadership positions and achieve growth that provides an enduring source of value to the company’s shareholders.
Johnson & Johnson was the industry’s leading health-care revenue generator during 2012 at $67.22 billion, more than $8 billion ahead of No. 2 Pfizer. J&J generated annual revenue increases from 2010 through 2012, with global sales rising 3.4 percent for 2012, 5.6 percent during 2011, and 0.5 percent in 2010. Sales by its U.S. companies totaled $29.8 billion during 2012 (up 3.2 percent), $28.9 billion in 2011 (down 1.8 percent) and $29.5 billion for 2010 (-4.7 percent). Sales accounted for by international companies reached $37.4 billion in 2012 (up 3.5 percent), $36.1 billion in 2011 (+12.4 percent) and $32.1 billion in 2010 (up 3.6 percent). The acquisition of Synthes, net of the related divestiture, increased total global sales growth and operational growth by 3.1 percent.
The five-year compound annual growth rates for J&J’s global, U.S. and international sales were +1.9 percent, for 2012, -1.7 percent during 2011, and +5.5 percent during 2010. The 10-year compound annual growth rates for worldwide, U.S. and international sales amounted to 6.4 percent in 2012, 2.9 percent for 2011, and 10.4 percent in 2010.
Sales in Europe during 2012 decreased 1.1 percent versus the performance in 2011, including operational growth of 5.8 percent offset by a negative currency impact of 6.9 percent. Sales in the Western Hemisphere (excluding the U.S.) for 2012 generated 12.3 percent growth compared to the previous year, including operational growth of 19 percent and a negative currency effect of 6.7 percent. Sales in the Asia-Pacific, Africa region rose 5.3 percent over 2011, including operational growth of 6.7 percent and a negative currency impact of 1.4 percent.
Consumer segment sales for 2012 totaled $14.4 billion, down 2.9 percent versus 2011, including 0.5 percent operational growth offset by a negative currency impact of 3.4 percent. U.S. Consumer segment sales amounted to $5.0 billion, declining 2 percent from 2011. International sales reached $9.4 billion, dropping 3.4 percent from 2011, which included 1.9 percent operational growth offset by a negative currency impact of 5.3 percent. The leading Consumer business segment for J&J in 2012 was OTC Pharmaceuticals and Nutritionals with sales of $4.4 billion, decreasing 1.1 percent.
J&J’s Pharmaceutical segment produced 2012 sales of $25.4 billion, rising 4 percent versus 2011, with operational growth of 6.8 percent and a negative currency impact of 2.8 percent. U.S. sales totaled $12.4 billion, up 0.3 percent. International sales amounted to $12.9 billion, growth of 7.9 percent versus 2011, which included 13.6 percent operational growth and a negative currency impact of 5.7 percent. According to IMS, J&J had the fastest-growing top 10 pharmaceutical business in the United States, Europe and Japan during 2012.
The company’s best-selling prescription medicine in 2012 was Remicade (infliximab), a treatment for immune-mediated inflammatory diseases. The biologic therapy accounted for 2012 sales of $6.14 billion for J&J, representing growth of 11.8 percent versus the drug’s 2011 performance for the company.
The Medical Devices and Diagnostics segment generated sales of $27.4 billion in 2012, up 6.4 percent over 2011, with operational growth of 8.7 percent and a negative currency impact of 2.3 percent. U.S. sales for 2012 totaled $12.4 billion, growing 8.7 percent. International sales amounted to $15.1 billion, rising 4.5 percent versus 2011, with operational growth of 8.6 percent and a negative currency impact of 4.1 percent. The Synthes acquisition, net of the related divestiture, increased total sales and operational growth for the Medical Devices and Diagnostics business by 7.9 percent. Leading this segment’s 2012 sales was the Orthopedics franchise at $7.8 billion, up 34.3 percent.
For the first half of 2013, J&J worldwide sales reached $35.38 billion, increasing 8.5 percent compared to the corresponding 2012 period. During January-June 2013, U.S. sales rose 9.5 percent to $15.97 billion and international sales grew 7.6 percent to $19.41 billion. Consumer segment sales in first-half 2013 improved 1.6 percent to $7.33 billion, with U.S. sales advancing 1.7 percent to $2.67 billion and the international figure rising 1.6 percent to $4.66 billion. Global Pharmaceutical sales increased 11 percent over first-half 2012 to $13.79 billion, with the United States advancing 11.9 percent to $6.85 billion and international sales going up 10.2 percent to $6.95 billion. In the Med Devices & Diagnostics area, global sales during the first six months of 2013 improved 9.9 percent to $14.26 billion; U.S. sales rose 10.6 percent to $6.45 billion and international sales climbed up 9.2 percent to $7.81 billion.
“Our strong second-quarter results reflect the progress we’ve made against our near-term priorities of delivering on our financial commitments, restoring a reliable supply of over-the-counter products to consumers, continuing the successful integration of Synthes and building on the momentum in our pharmaceutical business,” Mr. Gorsky noted. “Our talented colleagues at Johnson & Johnson continue to bring meaningful innovations to patients and consumers around the world and have positioned us well to deliver sustainable growth.”
Remicade continues on as Johnson & Johnson’s best-selling product as well as one of the leading medicines for any therapeutic indications worldwide. The drug’s global sales for J&J rose by double-digit percentages from 2010 through 2012, totaling $4.61 billion in 2010, $5.49 billion for 2011 (increasing 19.1 percent), and $6.14 billion during 2012 (rising 11.8 percent). The 2012 amount accounted for 9.1 percent of J&J’s total revenue for that year. Remicade sales have continued to grow in 2013, though the percentage increase has dropped off from the double digits. During the first half of 2013, the medicine’s global sales advanced 7.5 percent year over year to $3.27 billion.
Including sales reported by Merck & Co. and Mitsubishi Tanabe Pharma in their designated territories, the tumor necrosis factor blocker Remicade’s total global sales for 2012 amounted to about $8.99 billion. That amount made the product the No. 2 prescription drug seller worldwide after the recombinant human IgG1 monoclonal antibody Humira, which is a competitor to Remicade as they are marketed for some of the same therapeutic indications. Remicade is approved in the United States for moderately to severely active forms of Crohn’s disease, pediatric Crohn’s disease, ulcerative colitis, pediatric ulcerative colitis and rheumatoid arthritis; active ankylosing spondylitis; and chronic severe plaque psoriasis. Merck holds exclusive marketing rights to Remicade throughout Europe, Russia and Turkey. Mitsubishi Tanabe distributes the biologic product in Japan.
Simponi (golimumab) is one of the up-and-coming successes amongst J&J’s portfolio of medicines as the next-generation treatment to Remicade. The tumor necrosis factor blocker is FDA-approved for moderate-to-severe forms of rheumatoid arthritis and ulcerative colitis as well active forms of psoriatic arthritis and ankylosing spondylitis. Simponi sales amounted to $410 million during 2011 and $607 million for 2012. During the first six months of 2013, the biologic’s sales increased 71 percent year-over-year to $412 million.
Stelara (ustekinumab) is another up-and-comer in the immunology segment for J&J. Approved for the U.S. market during September 2009, the novel biologic therapy is available for treating moderate-to-severe plaque psoriasis. Stelara joined the blockbuster drug club for the first time during 2012 with global sales of $1.03 billion, up 38.9 percent over the product’s 2011 performance. Strong growth was also attained during the first six months of 2013, as Stelara sales rose 52.9 percent to $717 million versus its January-June 2012 result.
J&J’s second-largest therapeutic area in terms of sales after immunology is neuroscience. The two leading product sellers in this area are on the decline, Risperdal Consta and Concerta.
Risperdal Consta (risperidone) is marketed as a treatment for the management of bipolar I disorder and schizophrenia. The drug generated 2012 sales of $1.43 billion compared to $1.58 billion during 2011. During the first two quarters of 2013, Risperdal Consta global sales fell 6.3 percent year-over-year to $671 million.
Concerta (methylphenidate HCl) sales for 2012 totaled $1.07 billion after amounting to $1.27 billion during 2011 and $1.32 billion for 2010. The ADHD drug’s first-half 2013 sales dropped to $471 million, down 18.2 percent compared to the 2012 same time frame. J&J’s U.S. supply and distribution deal with Watson Laboratories to distribute an authorized generic version of Concerta started on May 1, 2011. The original
Concerta patent expired during 2004, and the companies have received FDA clearance to manufacture and market a generic version. Another generic form was introduced on Dec. 31, 2012, which J&J says will lead to continued reduction of Concerta sales.
On the other hand, J&J’s Invega franchise is on the upswing amongst the company’s Neuroscience segment. Invega (paliperidone) sales for 2012 reached $550 million versus the 2011 total of $499 million. In first-half 2013, worldwide sales rose 7.2 percent year-over-year to $282 million. The atypical antipsychotic was initially approved by U.S. regulators during December 2006 for treating schizophrenia.
Invega Sustenna (paliperidone palmitate) gained FDA clearance in late July 2009 for the acute maintenance treatment of schizophrenia in adults. The once-monthly, long-acting, injection was approved by EU regulators as Xeplion for maintenance treatment of schizophrenia during March 2011. Invega Sustenna/Xeplion sales totaled $378 million in 2011, $796 million for 2012, and $574 million in 1H 2013.
Prezista (darunavir) is the sales leader amongst J&J’s infectious disease portfolio. The drug was initially approved by U.S. health authorities during June 2006 in combination with ritonavir and other antiretroviral agents for treating HIV infection in antiretroviral treatment-experienced adult patients. Prezista sales increased from $1.21 billion during 2011 to $1.41 billion for 2012. During the latter year, FDA cleared a new 800-milligram tablet for once-daily oral administration for treating HIV-1 in treatment-naive and treatment-experienced adult patients with no darunavir resistance-associated mutations. For first-half 2013, the medicine’s sales rose 15.1 percent year-over-year to $802 million.
Incivo (telaprevir) was approved by EU regulators in September 2011 for treating chronic genotype 1 hepatitis C virus infection. The direct-acting antiviral protease inhibitor in 2Q 2013 gained EU approval for twice-daily dosing in combination with pegylated-interferon and ribavirin for naive and previous treatment-experienced patients. Incivo sales totaled $334 million in the first six months of 2013 after amounting to $234 million in first-half 2012.
Amongst the company’s oncology product arsenal, Velcade and Zytiga are leading the way. Velcade (bortezomib) has been on the U.S. market since May 2003 as an intravenous injection treatment for multiple myeloma. During 2012, U.S. and EU health authorities cleared Velcade for subcutaneous administration. Global sales increased from $1.27 billion during 2011 to $1.5 billion for 2012. First-half 2013 sales totaled $732 million, compared to $671 million for the first two quarters of 2012.
Velcade is the first in a specific class of medicines called proteasome inhibitors. Proteasomes are present in every cell and play a significant role in controlling cell function, growth and how cells interact with surrounding cells. Velcade reversibly interrupts the normal function of cell proteasomes causing myeloma cancer cells to stop growing and die.
Approved in more than 65 countries, Zytiga (abiraterone acetate) reached the U.S. arena during 2011 in combination with prednisone for treating metastatic castration-resistant prostate cancer in patients who have received previous chemotherapy containing docetaxel. FDA (in December 2012) and the European Commission (during January 2013) approved an expanded indication for Zytiga: in combination with prednisone, allowing for use before chemotherapy in the treatment of metastatic castration-resistant prostate cancer. Sales for the oral, once-daily medicine totaled $301 million in 2011, $961 million during 2012, and $739 million for first-half 2013.
As the oral anticoagulant Xarelto (rivaroxaban) advanced through the late-stage pipeline, it was popularly regarded as a future blockbuster brand. The orally bioavailable factor Xa inhibitor reached the U.S. marketplace during 2011. Xarelto is available for preventing thrombosis following total hip or knee replacement surgery; for preventing stroke in patients with atrial fibrillation; and for treating pulmonary embolism or deep-vein thrombosis or to reduce the risk of recurrence of DVT or PE following an initial six months of treatment for acute venous thromboembolism. Xarelto sales for J&J in the first six months of 2013 reached $347 million after totaling $76 million during January-June 2012. Jointly marketed by Bayer, the German pharma entity reported Xarelto sales of 374 million euros for the first half of 2013 versus 110 million euros in the one-year earlier period.
Xarelto is the most-prescribed novel oral anticoagulant in the United States and is the only one available for six clinical uses approved by FDA. According to J&J, the drug has earned the broadest reimbursement profile among novel anticoagulants, with 85 percent of patients on Medicare Part D and 85 percent of commercial patients covered at the lowest branded co-pay. As of September 2013, 5-plus million patients had received Xarelto globally and over 3 million U.S. prescriptions had been written.
In the pipeline/recent drug approvals
J&J is dedicated to investing in R&D with the aim of delivering high-quality and innovative products. Global costs of R&D activities for 2012 rose 1.6 percent versus the prior calendar term, reaching $7.67 billion. The Pharmaceutical business accounted for 2012 R&D of $5.36 billion, Medical Devices and Diagnostics represented $1.68 billion, and the Consumer segment expenditure was $622 million.
As of May 2013, J&J’s Pharmaceuticals Segment was well-positioned to continue driving growth with more than 10 potential new product submissions and 25-plus significant brand line extensions by 2017. J&J managers plan for new products to represent nearly half of the overall sales in the Pharmaceuticals segment by 2017. J&J intends to continue its dedication to addressing the most serious worldwide unmet medical needs to help transform the lives of patients. The R&D strategy builds on strong internal research and external innovation. The late-stage pipeline is led by potential breakthrough therapies that can help transform patient care and sustain future growth.
Aided by a unique model of innovation, J&J’s Pharmaceuticals segment has built an industry-leading pipeline that produced 11 new drug launches from 2009 through May 2013, more than doubling its productivity during the past four years. These new products, along with core growth brands, spurred 12 consecutive quarters of operational sales growth in the segment and contributed significantly to J&J’s recent earnings growth.
“Our investment in transformational innovation has enabled strong growth that has allowed us to continue investing in our future portfolio,” noted Paul Stoffels, M.D., chief scientific officer of J&J and worldwide chairman of the Pharmaceuticals Group. “With a steadfast focus on the most serious unmet medical needs, our approach is to identify the best science – internal and external – to deliver new options and solutions to patients. Today, we have an industry-leading pipeline of truly differentiated products and a track record of success resulting in more new molecular entity (NME) approvals per year at a lower development cost than the industry average.”
According to Joaquin Duato, worldwide chairman of the Pharmaceuticals Group, “We’ve spent the past five years transforming our business, and the growth we’re seeing today is the direct impact of that effort. The innovative new therapies in our pipeline will drive our next wave of growth. With strong momentum across our global Pharmaceuticals segment, we are executing well against our commercial strategy to gain market share and ensure greater access to our medicines. We’re also strengthening our presence in critical geographies and have nearly doubled our footprint in emerging markets during the last five years.”
J&J’s approach to innovation has led to a revitalized product portfolio for the Janssen Pharmaceutical Companies. Near-term and long-term compounds are being developed in the fields of immunology, neuroscience, infectious diseases and vaccines, cardiovascular and metabolism, and oncology.
Late-stage products Janssen intends to submit for marketing clearance by 2017 are directed at addressing serious unmet needs. Examples include simeprevir for hepatitis C, which is awaiting approval in United States, Europe and Japan; ibrutinib and daratumumab for treating hematologic malignancies, each having received Breakthrough Therapy Designations by U.S. regulators; sirukumab and guselkumab for significant immune-mediated diseases; a three-month formulation of Invega Sustenna/Xeplion, with a potential to change the treatment paradigm for schizophrenia; and novel vaccines for treating influenza, rabies and polio.
The pharma pipeline includes a host of potential first-in-class medicines. For example, ibrutinib is an investigational oral Bruton’s tyrosine kinase (BTK) inhibitor. The drug targets the B-cell receptor pathway by way of inhibiting BTK, a critical mediator in malignant B-cell growth and proliferation.
Ibrutinib is awaiting FDA approval for the treatment of two B-cell malignancies. The new molecular entity is intended for treating previously treated patients with chronic lymphocytic leukemia/small lymphocytic lymphoma, and previously treated patients with mantle cell lymphoma. If cleared for approval, ibrutinib would be the first in a class of oral BTK inhibitors and is one of the first medicines to be submitted for U.S. approval via FDA’s Breakthrough Therapy Designation pathway. Ibrutinib would be jointly marketed in the United States by Janssen Biotech and Pharmacyclics. The two companies entered a collaboration and license pact during December 2011 to jointly develop and commercialize the potential new medicine.
With substantial growth in the Asia-Pacific region pipeline, Janssen intends to continue accelerating its development-stage pipeline in Japan and China. Three new molecular entities and three brand-line extensions were in registration in Japan as of May 2013, and Janssen expects to submit two additional NMEs and six brand line extensions by 2017. In China, four NMEs and four line extensions are in registration, and Janssen plans to submit nine NMEs and six brand line extensions by 2017.
With a concentration on precision medicine, the company has additionally invested best-in-class research capabilities in genomics, biotechnology, biomarkers, companion diagnostics and vaccine platforms, and in accessing early-stage breakthrough innovation from the leading innovation hotspots globally. New products introduced since 2009 constituted 17 percent of total pharmaceutical sales in 2012, up from 9 percent for 2011. Fueled by new indications, label extensions and additional country launches of these products, as well as the potential new products expected to emerge from its pipeline, products launched since 2009 are anticipated to account for nearly half of the total sales in the segment by 2017. These products include Invega Sustenna/Xeplion, Simponi, Stelara, Zytiga, Xarelto, Incivo, Invokana (canagliflozin), and Sirturo (bedaquiline). Sirturo was FDA-approved in December 2012 for the treatment of pulmonary multi-drug resistant tuberculosis, the first new mechanism of action against tuberculosis in more than 40 years.
Invokana is Janssen’s first pharma product for treating adults with type 2 diabetes. Invokana was recommended for approval in the European Union during September 2013 for treating adults with type 2 diabetes mellitus to improve glycemic control. The oral, once-daily medicine belongs to a new class of medications known as sodium glucose co-transporter 2 (SGLT2) inhibitors. Invokana in March 2013 became the first SGLT2 inhibitor to gain FDA marketing clearance. Canagliflozin selectively inhibits SGLT2 and thus promotes the loss of glucose through the urine, lowering blood glucose levels in adults with type 2 diabetes.
Studies announced by Janssen R&D during June 2013 reinforce that Invokana provides greater improvements in blood glucose than sitagliptin (100 mg) or glimepiride (6 or 8 mg) in adults with Type 2 diabetes. Phase III results additionally showed that the novel medicine provides greater secondary endpoint reductions in weight and systolic blood pressure. Sitagliptin is the active chemical in Merck’s mega-blockbuster Januvia franchise and glimepiride is the main chemical in Sanofi’s sulfonylurea Amaryl.
Janssen-Cilag International announced in March 2103 the filing of a Marketing Authorization Application to the European Medicines Agency. The regulatory submission seeks approval of a fixed-dose therapy combining canagliflozin and immediate-release metformin to treat adult patients with type 2 diabetes. The first-line pharmacotherapy metformin can be used alone or with other medications, including insulin, to treat type 2 diabetes. If cleared for approval, the canagliflozin/metformin fixed-dose combo therapy could provide convenience for patients who may benefit from two diabetes medications in one pill.
Janssen Pharmaceuticals announced during September 2013 that the Phase III EINSTEIN program demonstrated Xarelto is as effective as the standard of care in reducing DVT and PE risk in people with symptomatic DVT or PE, while reducing the incidence of major bleeding by 46 percent. The analysis showed that safety and efficacy outcomes for Xarelto were consistent across four subgroups of participants: fragile subjects, those with cancer, subjects with a history of a recurrent venous thromboembolism and those presenting with a large clot.
In the rare disease area, Janssen Research & Development has been developing the orphan drug siltuximab for treating multicentric Castleman disease. The investigational, anti-Interleukin-6 chimeric monoclonal antibody targets and binds to human IL-6. Simultaneous Biologic License Application filings with U.S. and EU regulators were announced by Janssen during early September 2013. There are no approved treatments in those countries for MCD, a rare disorder in which lymphocytes – a certain form of white blood cells – are over-produced and result in enlargement of lymph nodes.
Stelara was recommended for EU approval during July 2013, alone or in combination with methotrexate, for treating active psoriatic arthritis in adult patients when the response to previous non-biological disease-modifying anti-rheumatic drug therapy has not been adequate. Psoriatic arthritis affects 4.2 million Europeans and there is no cure for the chronic immune-mediated inflammatory disease. Data from Stelara’s Phase III program, one of the largest carried out a biologic in psoriatic arthritis, demonstrated the product to be effective in improving symptoms and signs of active psoriatic arthritis in anti–tumor necrosis factor (TNF)-alpha naïve and experienced patients.
Simponi was cleared by the U.S. regulatory agency during May 2013 for treating moderately to severely active ulcerative colitis in adult patients who have shown corticosteroid dependence or who have had an inadequate response to or failed to tolerate oral aminosalicylates, oral corticosteroids, azathioprine, or 6-mercaptopurine. Simponi became the first biologic treatment approved to induce and maintain clinical response as well as improve endoscopic appearance of the mucosa during induction.
Also in 2Q 2013, Simponi Aria for infusion was approved by FDA for treating adults with moderately to severely active rheumatoid arthritis in combination with methotrexate. Simponi Aria is the first fully human anti-TNF-alpha infusible therapy on the market. The medicine targets soluble and transmembrane bioactive forms of TNF-alpha, a protein that when overproduced in the body because of chronic inflammatory diseases can result in inflammation and damage to bones, cartilage and tissue. By binding with and blocking TNF-alpha, Simponi Aria helps control inflammation as well as inhibit the progression of further joint damage.
The investigational NS3/4A protease inhibitor simeprevir is jointly developed by Janssen R&D Ireland and Medivir for treating genotype 1 chronic hepatitis C in adult patients with compensated liver disease, including every stage of liver fibrosis. The drug works by blocking the protease enzyme that allows the hepatitis C virus to replicate in host cells.
New drug applications were filed for simeprevir during 1Q 2013 in the United States and Japan for treating genotype 1 hepatitis C. FDA granted simeprevir priority-review status. A Marketing Authorisation Application was filed during April 2013 with the European Medicines Agency for clearance as a treatment of genotype 1 or genotype 4 chronic hepatitis C.
The investigational human monoclonal antibody daratumumab is undergoing Phase I/II studies for multiple myeloma. Possessing broad spectrum cytotoxic activity, the new drug candidate targets the CD38 molecule. That molecule is highly expressed on the surface of multiple myeloma cells and may have potential in other cancers on which CD38 is expressed. Daratumumab has potential applicability against other malignancies on which CD38 is expressed.
Daratumumab gained Breakthrough Therapy Designation from FDA as announced by Janssen R&D in early May 2013. Daratumumab was discovered by the Danish company Genmab. In August 2012, Genmab granted Janssen Biotech an exclusive global license to develop and commercialize the drug compound.
Updated results released in February 2013 demonstrate that Zytiga in combination with prednisone continued to provide statistically significant improvements in disease progression versus placebo plus prednisone, and longer overall survival in men with metastatic castration-resistant prostate cancer. The Phase III randomized, multicenter, placebo-controlled trial (COU-AA-302) additionally showed statistically significant improvement compared to placebo in the secondary endpoints of median time to opiate use for prostate cancer pain and to initiation of chemotherapy.
On the new device front, Ethicon Endo-Surgery during 2013 introduced the Harmonic Ace+ Shears with Adaptive Tissue Technology. This next-generation product in the best-in-class Harmonic portfolio of ultrasonic surgical devices can handle multiple surgical jobs such as dissection, sealing, transection and otomy creation. With Adaptive Tissue Technology, Harmonic Ace+ Shears responds intelligently to different tissue conditions by regulating energy delivery and providing surgeons with enhanced audible feedback. This allows the Harmonic Ace+ Shears to exhibit 23 percent less thermal spread while delivering 21 percent shorter transection times versus Harmonic Ace without Adaptive Tissue Technology. With a refined blade design, the tapered, coated blade is designed for multi-functionality with precise grasping and dissection.
Mentor MemoryShape Breast Implants obtained FDA clearance in June 2013 for breast augmentation in females at least 22 years old and for breast reconstruction. The implants provide new options for females looking for a more natural shape and youthful feel from breast enhancement or reconstruction surgery. Unlike round implants, the Mentor implants have a teardrop shape, very similar to the silhouette of a natural breast. Approved for longer than a decade outside of the United States, the implants are filled with a uniquely formulated cohesive gel. The teardrop shape and distinct gel form create the optimal balance of shape and feel, according to J&J’s Mentor Worldwide, the U.S. market leader in breast aesthetics.
Codman Neuro, a part of J&J’s DePuy Synthes Companies, received CE marking in June 2013 for Revive SE. The next-generation self-expanding clot-removal device is intended for use in treating acute ischemic stroke. The self-expanding nitinol basket is designed to ease navigation via small and tortuous blood vessels and arteries in the cerebral vasculature. The device allows for rapid restoration of blood flow to the brain during an acute ischemic stroke.
The Ethicon Endo-Surgery division Sedasys announced in May 2013 that FDA granted PMA approval for the Sedasys System. With first-in-class technology, this is the first computer-assisted personalized sedation system. The new system is indicated for the intravenous administration of 1 percent (10 mg/mL) propofol injectable emulsion for the initiation and maintenance of minimal-to-moderate sedation, as defined by the American Society of Anesthesiologists (ASA) Continuum of Depth of Sedation, in ASA physical status I and II patients ≥18 years old undergoing colonoscopy and esophagogastroduodenoscopy (EGD) procedures. The Sedasys System has the potential to redefine sedation delivery by allowing physician-led teams to administer minimal-to-moderate propofol sedation – personalized to the needs of every patient – by precisely integrating drug delivery and comprehensive patient monitoring.
Enseal G2 Cordless Tissue Sealer gained 510(k) clearance from U.S. regulators in March 2013. The ready-to-use cordless design provides surgeons with a new option for procedures where speed and range of motion may be critical. The self-contained device includes a generator and power source, thus no assembly is necessary, enabling a quick procedure set-up. The cordless feature removes the potential for tangled cords as multiple instruments are in use.
Another device that received FDA approval in 1Q 2013 was Enseal G2 Articulating Tissue Sealer. Cleared for marketing in February, this is the first articulating advanced energy device designed to enable surgeons to take a perpendicular approach to seal vessels up to 7mm in diameter and lymphatics through a 5mm port. Vessels sealed perpendicularly are stronger than those sealed at oblique angles. Stronger sealing aids in reducing the likelihood of internal bleeding and post-surgery complications.
LifeScan, part of the Johnson & Johnson Family of Diabetes Companies, announced that the OneTouch VerioSync Blood Glucose Monitoring System gained FDA approval in March 2013. This is the first meter to automatically send blood glucose results wirelessly through Bluetooth technology to an iPhone, iPad or iPod touch using the OneTouch Reveal mobile app. Users can view a 14-day summary of blood-sugar test results, simple visuals showing the percentage of test results within target range, and then share that data through email or text with their care providers, family or friends.
In the consumer health area, 1-Day Acuvue TruEye Brand Contact Lenses (narafilcon A) were launched in the United States in June 2013. The innovative contact lens has a distinctive balance of properties that allows for exceptional comfort versus a contact lens-free eye. This is the world’s first daily disposable contact lens composed of a super-breathable silicone hydrogel material that provides 98 percent of available oxygen to the open eye. The new lens features Hydraclear 1, a third-generation technology that embeds the highest volume of moisture-rich wetting agent in the Hydraclear family. 1-Day Acuvue TruEye Brand Contact Lenses offer Class-1 UV-Blocking, the highest level of UV protection in a contact lens. The new lenses will gradually replace 1-Day Acuvue TruEye (narafilcon B), which was introduced to the U.S. market in 2010.
Certain businesses were acquired by J&J for $17.82 billion in cash and stock as well as $1.2 billion of liabilities assumed in 2012. These acquisitions included: Synthes, a worldwide developer and manufacturer of orthopedics devices; Guangzhou Bioseal Biotech, a developer of biologic combinations addressing moderate-to-severe hemostasis; Angiotech Pharmaceuticals, intellectual property and know-how related to the Quill Knotless Tissue-Closure Device; Corlmmun, a developer of a Phase II treatment for CHF; Calibra Medical, developer of a unique, wearable three-day insulin patch for convenient and discreet mealtime dosing for individuals with diabetes who take multiple daily injections of insulin; Spectrum Vision, a full-service distributor of contact lenses serving Russia with facilities in the Ukraine and Kazakhstan; and marketing authorizations, trademarks and patents extending Zyrtec related market rights in Australia and Canada.
The Synthes transaction for a purchase price of $20.2 billion in cash and stock represents the largest one ever for J&J. The net acquisition cost of the deal was $17.5 billion based on cash on hand at closing of $2.7 billion. Through this transaction – completed during June 2012 – the combination of Synthes and J&J’s DePuy Companies constitutes the largest business within the Medical Devices and Diagnostics segment of Johnson & Johnson. DePuy provides one of the most diverse orthopedics portfolios in the industry, and Synthes is an innovator in trauma, spine, cranio-maxillofacial and power tools.
During 2013, J&J acquired Aragon Pharmaceuticals. The privately held, pharma discovery and development company concentrated on drugs to treat hormonally driven cancers. The transaction included Aragon’s androgen receptor antagonist program and lead product candidate ARN-509. The second-generation androgen receptor signaling inhibitor is undergoing Phase II development for castration resistant prostate cancer. The deal, valued potentially at up to $1 billion, was closed in August 2013.
J&J’s Cordis – a global leader in the development and manufacture of interventional vascular technology – completed the acquisition of Flexible Stenting Solutions in March 2013. FSS is a leading developer of innovative flexible peripheral arterial, venous and biliary stents. The FlexStent Self Expanding Stent System provides Cordis with the opportunity to evolve its S.M.A.R.T. Stent platform to address unmet needs in treating peripheral artery disease. S.M.A.R.T. is the only stent FDA-approved for iliac, superficial femoral artery, and proximal popliteal artery vascular indications.
Product sales sales
Remicade $6,139 $5,492
Velcade $1,500 $1,274
Eprex $1,462 $1,623
Consta $1,425 $1,583
Prezista $1,414 $1,211
Methylphenidate $1,073 $1,268
Stelara $1,025 $738
Zytiga $961 $301
Pariet $835 $975
Xeplion $796 $378
Simponi $607 $410
Invega $550 $499
All sales are in millions of dollars.
Revenue $67,224 $65,030
Net Income $10,853 $9,672
Diluted EPS $3.86 $3.49
R&D $7,665 $7,548
Revenue $35,382 $32,614
Net Income $7,330 $5,318
Diluted EPS $2.55 $1.91
R&D $3,730 $3,411
All figures are in millions of dollars except EPS.
Posted: October 2013