Weak consumer sales and flat medical device and diagnostics sales didn't
stop Johnson & Johnson ($JNJ) from trouncing analyst estimates Tuesday--or from raising its guidance
for the year. A lineup of hot new meds powered the drug giant's first-quarter
performance, helping pharma sales climb nearly 11% to $7.5 billion.
Overall, those pharma sales pushed J&J's revenue haul up 3.5% to $18.1
billion; that, in turn, took earnings up to $1.54 per share excluding special
items, topping the $1.48 per share that analysts forecast, according to Thomson
Reuters.
"Johnson & Johnson delivered strong first-quarter results
driven by successful new product launches and the continued growth of key
products," CEO Alex Gorsky said in a statement. "… We also advanced our near-term priorities and
long-term growth drivers, positioning us well to deliver sustainable
results."
Among those newcomers chipping in was Olysio, a hepatitis C treatment that got a boost from Gilead's ($GILD) next-gen wonder drug Sovaldi. The drug netted $354 million for the quarter, thanks to a recommendation
from the medical community for use of Olysio and Sovaldi in tandem.
"Olysio contributed the lion's share of U.S. pharma growth in the
quarter--and still more to come," Leerink Swann analyst Danielle Antalffy
wrote in a note to investors.
The surprise sales hike also drove a major piece of J&J's increased
guidance, CFO Dominic Caruso said on an investor call, with the company upping
earnings expectations for the rest of this year by 5 cents to $5.80 to $5.90
per share--a range Antalffy still labeled conservative.
New prostate cancer drug Zytiga also made a splash, with worldwide sales leaping 48.8% to tally $512 million.
Market share growth helped power those increases, with Zytiga now in control of
34% of the market, Caruso said; progress with reimbursement and label expansion
drove the drug's progress outside the U.S.
Sales of new age anticoagulant Xarelto leapt, too, more than doubling to reach $319 million. Psoriasis treatment Stelara and Type 2 diabetes med Invokana also performed well, padding the totals
put up by older powerhouse meds like multiple myeloma treatment Velcade and
top-seller Remicade.
Pharma gains more than made up for the 3.2% quarterly decline posted by
J&J's McNeil consumer healthcare unit, which has seen its share of
manufacturing snags in recent years. But as McNeil waits for the completion of
its consent decree with the FDA, expected late this year or early next, Caruso
says the company expects to see overall margins improve.
"We're showing double-digit consumption growth" in the affected
products, Caruso said on the call. "We're very pleased with the uptake."