Magazine
#5 Johnson & Johnson
One Johnson & Johnson Plaza
New Brunswick, NJ 08933
Tel: (732) 524-0400
Fax: (732) 524-3300
www.jnj.com
| Headcount | 115,200 | |
| Year Established | 1887 | |
| Pharma Revenues | $22,322 |
1% |
| Total Revenues | $50,514 |
7% |
| Net Income | $10,411 |
22% |
| R&D Budget | $6,312 |
21% |
| Drugs Approved | |
| Drug |
Indication |
| ionsys | acute, post-operative pain |
| levaquin | bacterial sinusitis |
| remicade | psoriatic arthritis, ulcerative colitis |
| razadyne ER | Alzheimer’s disease |
| topamax | pediatric epilepsy |
| doxil | ovarian cancer |
| prezista | HIV/AIDS |
| velcade | multiple myeloma (Canada) |
| Drugs Pending | |
| Drug |
Indication |
| paliperidone ER OROS | schizophrenia, bipolar mania |
| remicade | psoriasis/pediatric Crohn’s |
| Drugs in Phase IIB and Beyond | |
| Drug |
Indication |
| paliperidone palmitate IM |
long-acting injectable, schizophrenia |
| risperdal consta | bipolar maintenance, long-acting injectable |
| topamax | pediatric exclusivity |
| cnto 1275 | psoriasis |
| cnto 148 | ankylosing spondylitis, rheumatoid arthritis, psoriatic arthritis |
| procrit | anemia in critically ill patients, non-chemo anemia |
| ica-17043 | sickle cell disease |
| levaquin | pediatric community acquired pneumonia |
| ceftobiprole | complicated skin and skin structure infections, nosocomial pneumonia |
| doripenem | complicated urinary tract infections, complicated intra-abdominal infections, nosocomial pneumonia |
| doxil | multiple myeloma, breast cancer |
| yondelis | relapsed ovarian cancer |
| tmc125 | HIV/AIDS |
| oros hydromorphone | chronic pain |
| reopro | facilitated percutaneous coronary intervention (PCI) |
| bay 59-7939 | venous thromboembolism (VTE) prevention after major orthopedic surgery |
| Early Research Proejcts |
|
| Drug |
Indication |
| vx-950 | hepatitis C |
| trabectedin | soft tissue sarcoma |
| Drugs Coming Off Patent | |
| Drug |
Indication |
| ortho tri-cyclen lo | oral contraceptive |
| risperdal | antipsychotic |
| topamax | epilepsy |
| Top Selling Drugs |
|||
| Drug |
Indication |
Sales |
(+/- %) |
| risperdal | antipsychotic | $3,552 |
16% |
| procrit/eprex | anemia | $3,324 |
-7% |
| remicade | rheumatoid arthritis | $2,535 |
18% |
| topamax | epilepsy | $1,680 |
19% |
| duragesic | chronic pain | $1,585 |
-24% |
| levaquin | infection | $1,492 |
15% |
| aciphex/pariet | gastrointestinal | $1,169 |
5% |
| concerta | ADHD | $774 | 11% |
| sporanox | antifungal | $507 | -23% |
Account for 74% of total pharma sales, up from 72% in 2004.
PROFILE
Has Johnson & Johnson taken its eye off the Pharma-ball? The company spent much of 2005 trying to complete the acquisition of device-maker Guidant, only to see that effort fall short in January 2006. Meanwhile, the company posted only a slight gain in its 2005 drug revenues ($22.3 billion), followed by a 2% drop in 1Q2006. J&J's medical device and diagnostic revenues grew 13% to $19.0 billion in 2005 and 5% in 1Q2006.
Consumer sales grew 9% to $9.0 billion in 2005. Shortly before press time, the company won the auction for Pfizer's Consumer Health unit. J&J spent a reported $16.6 billion for the rights to add such products as Listerine mouthwash, Sudafed decongestant and Nicorette smoking cessation products to its Tylenol, Neutrogena and Johnson's Baby Shampoo franchises. The Pfizer unit brought in $3.9 billion in 2005 revenues. Under the terms of the agreement, J&J will also get the right to switch Pfizer's non-sedating prescription Zyrtec (antihistamine) to OTC use in the U.S.
| THE LOWE DOWN People often forget J&J when they're thinking of big pharma companies, probably because a lot of their money comes from medical devices. That's a mistake, because--even on a pharma-only basis--they're a pretty big deal. But what are their plans for remaining one? J&J's announcement of research cutbacks earlier this year surprised a lot of people, because J&J wasn't on most lists of companies in trouble. They'd been quietly making deals in some of their key therapeutic areas, which are an interesting mix (for one thing, I think they're the only company in the top dozen besides Lilly that makes so much money from CNS). The stent business was coining money, despite an epic battle with Boston Scientific. But they've lost some profitable products recently (such as transdermal fentanyl) and there have been recent reports that the billion-dollar stent market might be slowing down. Adding to the worrisome signs, a lot of their late-stage pipeline looks like attempts to prolong the lifetimes of drugs that they're already selling. Maybe these cutbacks shouldn't have been so surprising after all. --Derek Lowe |
"We see the consumer health care markets as increasingly attractive growth opportunities as consumers take greater interest in and responsibility for their own health," said William C. Weldon, J&J's chairman and chief executive officer in a press statement. "In addition, higher levels of disposable income in developing nations are helping drive increased demand for consumer health products."
What About Drugs?
The company has prided itself on having a multitude of billion-dollar drugs, so as not to rely on any one product for a major portion of its revenues. So, while J&J's hormonal contraceptives franchise may drop under the billion-dollar mark in 2006, it could be offset by Concerta (up 19% in 1Q2006 to $235 million).
New top-seller Risperdal added more than $500 million in sales in 2005, but its gains were offset by a $500 million decline in Duragesic sales, as that drug faced generic competition in the U.S. and Europe. J&J's previous #1 drug, Procrit/Eprex, dropped 7% in 2005 as it faces greater competition from newer anemia treatments. In 1Q2006, it was only $100 million ahead of Remicade in sales, and likely will be surpassed in sales by the end of this year.
One of J&J Pharma's few bright spots, Remicade continued to gain approvals for new indications in the past year. The bio-drug was approved for psoriatic arthritis, ulcerative colitis, severe plaque psoriasis (EU), and pediatric Crohn's disease in the past year-plus. The company recently filed an sBLA for inhibiting the progression of structural damage and improving physical function in patients with active psoriatic arthritis. Remicade is in a crowded marketplace, battling Humira, Enbrel, Kineret and now Orencia.
New Review
J&J's new drug pipeline is progressing, but analysts don't seem thrilled with the late-stage products. In November 2005, the company submitted an NDA for Paliperidone ER (no trade name as of press time), a schizophrenia treatment intended to follow up Risperdal, the basic version of which faces patent expiration in 2008.
| R&D REORGANIZATION In February 2006, Stefanie Matteson of the Courier News of Bridgewater, NJ reported that J&J Pharmaceutical R&D laid off 300 people in its early development unit in Raritan, NJ. J&JPR&D employed 4,500 people. The company decided to consolidate operations at the site with those in Spring House, PA. Located 50 miles from the Raritan site, the Spring House location planned to add 100 workers to the 625 who worked there before the NJ layoffs. According to Ms. Matteson’s article: The announcement of the layoffs was made by Garry Neil, president of [J&J PR&D], Knewitz said. He said employees had previously been notified that a review was under way to find ways to make the unit more productive. "The unit was consolidated with a unit doing similar work about 50 miles away," Knewitz said. "By creating one larger unit with a greater critical mass, we felt we could be more productive." The unit conducts research in drug discovery and takes drug development into the earliest stages of clinical trials, he said. Those who lost their jobs included both research and support personnel. |
In May 2006, the company's Alza unit received approval for its NDA for Ionsys, a transdermal system for acute postoperative pain. Ionsys was originally submitted in September 2003, and was approved in the EU in January 2006.
In June 2006, the FDA approved the NDA for Prezista, a protease inhibitor to treat HIV. J&J developed the drug through its Tibotec Pharmaceuticals sub-unit, and trials results were promising enough for the drug to receive fast track designation from the FDA. Prezista was given the green light to be co-administers with other antiretroviral agents.
At the end of 2005, the company stated that it has 18 new molecular entities and 57 line extensions in full development, and 71 NMEs and 25 extensions in early development. (Caveat: "NMEs include significant new product innovations that may incorporate existing molecules.")
Breathless
One of the company's promising drugs, Natrecor (heart failure) has been riddled with controversy, especially as it moved out of the hospital setting and into the outpatient realm. The company received a subpoena from the U.S. Attorney's Office in Boston in July 2005 to provide documents related to the drug's sales and marketing.
In April 2005, the company convened an independent panel of experts to assess the drug's risks. The panel recommended limitations on Natrecor's use, including not administering it outside the hospital.
The panel also concluded that new trials would help generate better information about the risk profile. So in June 2006, J&J unit Scios announced that it was launching a 7,000-person international trial to assess the benefits and safety profile of the drug. Said Roger Mills, M.D., vice president, Medical Affairs at Scios, "This trial underscores our confidence in the safety and efficacy of Natrecor as a treatment for acutely decompensated heart failure and reflects a major commitment to heart failure patients and the doctors, nurses and pharmacists who help treat these patients. We believe this study will deliver timely, thorough and meaningful data regarding the safety and efficacy of Natrecor, and more clearly define the benefit/risk ratio." That trial will begin in 2007. While J&J doesn't break out Natrecor's sales, they were believed to be around $700 million in 2004, and may have been halved in 2005 after the renal issues were reported.
Given the risks of the drug industry, I can understand why J&J is emphasizing the (somewhat) more stable field of devices and diagnostics. The Cordis franchise, which sells cardiovascular products, was driven by the Cypher stent, which elutes sirolimus to reduce reblockage (restenosis) of coronary arteries. J&J doesn't break out sales of individual devices, but the Cordis group posted 2005 revenues of $4.0 billion, up 24% from 2004. The Dupuy franchise, which makes orthopedic joints, added $3.8 billion in 2005 sales, up 13%.
Every company on this list has developed a strategy for growth. J&J's has held fast to its principle of diversification. The company has added drug delivery capabilities and biologic development expertise in recent years, but it looks like the device and diagnostics world will help hedge J&J's bets and sustain the company during lean pipeline times.
