TRENTON, N.J. (AP) – Johnson & Johnson likely will discuss its 2012 growth prospects, a key drug approval and progress on its manufacturing problems when it reports its fourth-quarter results before the stock market opens on January 24.
Chief Executive Officer Bill Weldon will give analysts his annual update on how the health conglomerate did over the past year, current strategies, products in development and growth prospects. He’s expected to summarize efforts to get the many McNeil Consumer Healthcare products recalled since September 2009 back on store shelves – and how to win back consumers who have switched to rival brands, particularly cheaper store brands.
New Brunswick, N.J.-based J&J recently began running TV ads for some of those items, as well as coupons in newspapers under the theme “healthy essentials,” for products ranging from its OneTouch blood sugar-testing supplies to iconic Johnson’s baby products and Listerine.
Chief Financial Officer Dominic Caruso will give the company’s first 2012 financial forecast, eagerly awaited after rare revenue declines in 2009 and 2010 and the continuing problems with recalls last year.
Caruso or Weldon likely will outline the next steps in J&J’s $21.3 billion acquisition – its biggest purchase ever – of Synthes after shareholders of the Swiss orthopedic products maker voted overwhelmingly in December to accept the offer.
Executives should note that anticlotting drug Xarelto, jointly developed with German drugmaker Bayer Healthcare, in November got U.S. approval for use in a key group of patients, the more than 2 million Americans with a common irregular heartbeat, atrial fibrillation, that can trigger a stroke. The daily pill was approved in July for preventing stroke in a much-smaller group, patients receiving hip and knee replacements.
Weldon may give an update on the long-term shortage of cancer drug Doxil, because J&J’s contract manufacturer, Ben Venue Laboratories Inc., hasn’t been maintaining equipment or promptly investigating defective product batches and other serious problems at its Ohio factory. J&J has been lining up another manufacturer.
Executives also probably will note a December deal with Pharmacyclics Inc. to develop an experimental blood cancer drug that could bring that company more than $1 billion.
Analysts likely will bring up the latest development in litigation over J&J’s alleged improper marketing of powerful antipsychotic drug Risperdal for unapproved uses. On Thursday, J&J agreed to pay the state of Texas $158 million, ending a trial over a Medicaid fraud lawsuit in which Texas was seeking $1 billion. J&J was accused of improperly influencing officials and doctors to push the pricey drug, which has severe side effects.
Analysts may ask about J&J halting a study of an additional use for intravenous antibiotic Doribax because more pneumonia patients taking it in the study died, compared with those getting an older combination drug.
Investors want to see whether J&J has finally reversed an unprecedented two-year revenue slide due to all the product recalls, generic competition to some prescription drugs, price pressures from government health programs in Europe and customers defecting to cheaper consumer health brands. Some analysts have called for Weldon’s ouster, but it appears that the board of directors he chairs will leave him in place until he fixes the manufacturing quality problems behind recalls of millions of bottles of Tylenol and Motrin, faulty knee replacements, stinging contact lenses and a few prescription drugs.
Analysts polled by FactSet, on average, expect earnings per share of $1.09 and sales of $16.28 billion.
Last year, Johnson & Johnson reported profit of $1.94 billion, or 70 cents per share, on revenue of $15.64 billion; that revenue was $1 billion below the year-earlier total and missed analysts’ expectations.
Date: January 20, 2012
Source: Associated Press