(Reuters) – Johnson & Johnson beat quarterly profit estimates on higher sales at its pharmaceuticals unit even as it faces fierce competition for some of its biggest drugs, sending the company’s shares up more than 2 percent.
FILE PHOTO: A Johnson & Johnson building is shown in Irvine, California, U.S., January 24, 2017. REUTERS/Mike Blake/File Photo
Sales from the business, which accounts for more than half of the company’s total revenue, rose 4.1 percent and beat estimates, mainly boosted by demand for Stelara – its treatment for psoriasis and Crohn’s disease – as well as cancer drugs Darzalex and Imbruvica.
“J&J’s first-quarter results reflect another stellar quarter in pharma despite significant generic/biosimilar headwinds and continued progress in medical devices,” Cowen & Co analyst Joshua Jennings said.
J&J’s medical device unit, its second-largest business, reported a 4.6 percent fall in sales but beat analysts’ average estimate of $6.44 billion.
The unit has been struggling with slow growth of its spine and hip business, and the drugmaker has been selling off some underperforming businesses.
Sales of Stelara jumped about 32 percent in the quarter to $1.41 billion, while revenue from prostate cancer drug Zytiga, which is facing competition from cheaper generics, fell 19.6 percent.
Sales of Darzalex, used to treat multiple myeloma, and Imbruvica, which J&J jointly sells with Abbvie Inc, also rose in double digits on a percentage basis.
Overall sales increased slightly to $20.02 billion, edging past the average estimate of $19.61 billion, according to IBES data from Refinitiv.
The company’s net profit fell 14.2 percent to $3.75 billion in the first quarter. J&J recorded litigation expense of $423 million in the first quarter. The company did not record litigation expense in the year-ago period.
Excluding items, the company earned $2.10 per share, beating analysts’ estimate of $2.03 per share.
For the full year, the company said it expects adjusted operational sales, which excludes the impact of M&As and a stronger dollar, to rise between 2.5 percent and 3.5 percent, compared with its previous forecast of a 2 percent to 3 percent rise.
The healthcare conglomerate’s shares were up 1.8 percent at $139 before the opening bell.
Reporting by Manas Mishra and Saumya Sibi Joseph in Bengaluru; Editing by Saumyadeb Chakrabarty