Johnson & Johnson fourth quarter sales decreases 5.5% to $15.6 billion

Johnson & Johnson (NYSE: JNJ) today announced sales of $15.6 billion for the fourth quarter of 2010, a decrease of 5.5% as compared to the fourth quarter of 2009. Operational sales declined 5.1% and the negative impact of currency was 0.4%. Domestic sales declined 8.1%, while international sales declined 3.1%, reflecting an operational decline of 2.3% and a negative currency impact of 0.8%. Worldwide sales for the full-year 2010 were $61.6 billion, a decrease of 0.5% versus 2009. Operational sales declined 1.3% and the positive impact of currency was 0.8%.  Domestic sales declined 4.7%, while international sales increased 3.6%, reflecting operational growth of 1.9% and a positive currency impact of 1.7%.

Net earnings and diluted earnings per share for the fourth quarter of 2010 were $1.9 billion and $0.70 respectively. Fourth-quarter 2010 net earnings included after-tax charges of $922 million representing the net impact of litigation settlements, product liability expense and costs associated with the DePuy ASR® Hip recall. Fourth-quarter 2009 net earnings included an after-tax restructuring charge of $852 million and an after-tax gain of $212 million representing the net impact of litigation settlements. Excluding these special items, net earnings for the current quarter were $2.9 billion and diluted earnings per share were $1.03, representing increases of 0.6% and 1.0%, respectively, as compared to the same period in 2009.

Net earnings and diluted earnings per share for the full-year 2010 were $13.3 billion and $4.78, respectively. Full-year 2010 net earnings included an after-tax gain of $55 million representing the net impact of litigation settlements, product liability expense and costs associated with the DePuy ASR® Hip recall. Full-year 2009 net earnings included an after-tax restructuring charge of $852 million and an after-tax gain of $212 million representing the net impact of litigation settlements. Excluding these special items, net earnings for the full-year 2010 were $13.3 billion and diluted earnings per share were $4.76, representing increases of 2.9% and 2.8%, respectively, as compared with the full year in 2009.

The Company announced earnings guidance for full-year 2011 of $4.80 to $4.90 per share, which excludes the impact of special items.

"Although 2010 was a challenging year, the business continued to deliver earnings growth, while investing in the future and emerging a stronger organization," said William C. Weldon, Chairman and Chief Executive Officer. "While we will continue to see near-term pressures on the business for 2011, we remain committed to investing in innovative products, a robust pipeline and talented people who will sustain our growth and increase our market leadership in one of the most important and rewarding industries in the world."

Worldwide Consumer sales of $14.6 billion for the full-year 2010 represented a decrease of 7.7% over the prior year consisting of an operational decline of 8.9% and a positive impact from currency of 1.2%. Domestic sales decreased 19.3%; international sales increased 1.2%, which reflected an operational decline of 1.0% and a positive currency impact of 2.2%.

Sales were significantly impacted by the previously announced recalls of certain over-the-counter medicines and the suspension of manufacturing at the McNeil Consumer Healthcare Fort Washington, Pa., facility as well as the currency devaluation in Venezuela.  With respect to the McNeil Consumer Healthcare product recalls, Mr. Weldon stated, "We have made a commitment to restoring these products to the levels of quality and compliance that consumers expect of Johnson & Johnson."

Positive contributors to the operational sales results included anti-smoking aids and AVEENO®, Dabao, and JOHNSON'S® skin care products.

Worldwide Pharmaceutical sales of $22.4 billion for the full-year 2010 represented a decrease of 0.6% versus the prior year with an operational decline of 1.0% and a positive impact from currency of 0.4%. Domestic sales decreased 4.0%; international sales increased 4.2%, which reflected an operational increase of 3.4% and a positive currency impact of 0.8%.

Sales results include the strong performance of newly launched products including STELARA™ (ustekinumab), a biologic approved for the treatment of moderate to severe plaque psoriasis; SIMPONI™ (golimumab), a biologic approved to treat adults with moderate to severe rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis; and INVEGA® SUSTENNA™ (paliperidone palmitate) a once-monthly, long-acting, injectable atypical antipsychotic for the acute and maintenance treatment of schizophrenia in adults.

Several other products also had strong operational sales growth including REMICADE® (infliximab), a biologic approved for the treatment of a number of immune mediated inflammatory diseases; PREZISTA® (darunavir), a treatment for HIV; VELCADE® (bortezomib), a treatment for multiple myeloma; and international sales of RISPERDAL® CONSTA® (risperidone) Long-Acting Treatment, an antipsychotic medication.

Sales results of TOPAMAX® (topiramate), an antiepileptic and a treatment for migraine, and RISPERDAL® (risperidone), an antipsychotic medication, were negatively impacted by continued generic competition.

During the quarter, the Company submitted a New Drug Application (NDA) to the U.S. Food and Drug Administration (FDA) for abiraterone acetate administered with prednisone, an investigational drug for the treatment of metastatic, advanced prostate cancer in patients who have received prior chemotherapy containing a taxane. In addition, the Company submitted supplemental Biologics License Applications to the FDA seeking to expand the SIMPONI® label for the inhibition of structural damage in the treatment of psoriatic arthritis and for REMICADE® (infliximab) for the treatment of moderately to severely active ulcerative colitis in pediatric patients who have had an inadequate response to conventional therapy.

Also during the quarter, Janssen-Cilag International NV filed marketing authorization applications with the European Medicines Agency (EMA) for abiraterone acetate and for telaprevir, an investigational, oral, direct-acting antiviral for the treatment of chronic genotype 1 hepatitis C virus. The Company also received a positive opinion from the EMA's Committee for Medicinal Products for Human Use recommending the granting of a marketing authorization for paliperidone palmitate for the treatment of schizophrenia.

In January 2011, the Company submitted a NDA to the FDA for rivaroxaban, an investigational, oral, once-daily anticoagulant for the prevention of stroke and non-CNS systemic embolism in patients with atrial fibrillation. In addition, the Company announced that the European Commission approved INVEGA® (paliperidone ER), the first antipsychotic schizoaffective treatment in Europe, indicated for treatment of psychotic or manic symptoms.

Worldwide Medical Devices and Diagnostics sales of $24.6 billion for the full-year 2010 represented an increase of 4.4% versus the prior year with an operational increase of 3.4% and a positive impact from currency of 1.0%. Domestic sales increased 3.6%; international sales increased 5.0%, which reflected an operational increase of 3.0% and a positive currency impact of 2.0%.

Primary contributors to operational sales growth included Ethicon's surgical care products; Ethicon Endo-Surgery's minimally invasive and advanced sterilization products; DePuy's orthopaedic joint reconstruction and sports medicine businesses; Biosense Webster's electrophysiology business; Vistakon's disposable contact lenses; and Ortho-Clinical Diagnostics' products. This growth was partially offset by lower sales in the Cordis franchise, reflecting continued market and competitive pressures in the drug-eluting stent market.

During the quarter, the Company submitted a Biologic License Application to the FDA for the Fibrin Pad, a novel product that combines Ethicon's biomaterials and plasma-derived biologics (Human Fibrinogen and Human Thrombin), to aid in stopping soft tissue bleeding during surgery. In addition, the Company received CE Mark for OneTouch® Verio®Pro, a system for self monitoring of blood glucose levels.

Source:

Johnson & Johnson

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