Johnson & Johnson on Tuesday reported better-than-expected second quarter profit as sales of pharmaceuticals surged 20 percent despite a sharp decline in blockbuster arthritis drug Remicade, and its shares rose more than 4 percent.
The healthcare conglomerate also expressed confidence that last week`s finding by a Missouri jury that J&J`s talc-based products caused cancer, and an order to pay a record $4.69 billion to defendants, would not stand.
"We are confident that there are multiple grounds for reversal of this jury verdict and that, ultimately, the case will be reversed," Chief Executive Alex Gorsky said on a call with analysts. He said the products do not contain asbestos or cause ovarian cancer.
Morningstar analyst Damien Conover said he expects J&J to be aggressive in fighting these lawsuits, "and the final related payments will not cause a major impact to its valuation."
J&J shares were up 3.2 percent at $128.70 after earlier climbing as much as 4.6 percent - the biggest one-day percentage gain in over two years.
Gorsky acknowledged that sales growth in the consumer products division and some segments of medical devices were disappointing. New drugs and those in development "position us well to outgrow the market for many years to come," he said.
As the first major drugmaker to report second quarter results, Gorsky addressed intensifying political pressure to reduce costs of prescription drugs to U.S. consumers.
J&J said overall net prices of its drugs would be about 4.5 percent lower this year after rebates and discounts. It did not say anything about lowering list prices of its medicines.
When looking for potential solutions, Gorsky said: "We need to be extremely careful and cognizant about avoiding unintended consequences which may ... decrease patients` access to affordable and quality health care."
J&J narrowed its 2018 adjusted earnings forecast, raising the midpoint by 2 cents. It now expects $8.07 to $8.17 per share, up from its prior view of $8.00 to $8.20.
Excluding items, the company reported a profit of $2.10 per share, beating analysts` average estimate by 3 cents.
Sales of Stelara for psoriasis and other autoimmune diseases jumped 36 percent to $1.34 billion, while sales of prostate cancer drug Zytiga surged 63 percent to $909 million.
The company said it does not expect generic competition for Zytiga this year.
Cancer drugs Darzalex and Imbruvica also experienced high double-digit sales increases that exceeded Wall Street forecasts, with sales of $511 million and $620 million, respectively.
New psoriasis drug Tremfya was off to a strong start, taking in $126 million, above analysts` estimates of about $70 million.
Sales of Remicade, faced with competition from cheaper biosimilar versions, fell 13.7 percent to $918 million.
Net earnings rose to $3.95 billion, or $1.45 per share, from $3.83 billion, or $1.40 per share, a year earlier.
Total sales rose 10.6 percent to $20.83 billion, topping analysts` estimates of $20.39 billion.
J&J lowered its full-year sales forecast to $80.5 billion to $81.3 billion from $81.0 billion to $81.8 billion, citing a strengthening dollar for the trim.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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