Johnson & Johnson announced “exceptional” growth in its pharmaceuticals business thanks to the rewards from a series of successful drug launches. Prescription medicines has proved itself to be the strongest part of the companys portfolio in recent quarters, compensating for the relatively slow growth in medical devices and consumer products.
This trend became stronger in 2013, especially taking into account companys drug revenues, which increased by 10% and reached 28.1 billion dollars. This process was also benefited by some new products such as Zytiga. One of the most successful research and development pipelines in the drugs industry has been carried out since 2009 by Johnson & Johnson.
As the Financial Times reported, currently, most pharmaceuticals companies are under pressure to find new products in order to compensate for a wave of patent expires on blockbuster drugs. The success of Johnson & Johnson is due to the fact the company has managed to deal with the patent problems, which give it the opportunity to maintain its growth. This proved to be life-saving for Johnson & Johnson, which underwent through a tough period, when its consumer business was put under the influence of a series of damaging recalls that varied from Tylenol painkillers to contact lenses.
The current Chief Executive Officer of the company – Alex Gorsky, who took the position in 2012, announced that 75% of Johnson & Johnsons over-the-counter products were back on the shelves after an overhaul of its manufacturing processes. The company posted fourth-quarter net earnings, which rose 37% to 3.52 billion dollars. They even surpassed the Wall Street forecasts by 1.23 dollars per share.
One of the analysts working for Leerink – Danielle Antalffy – said that momentum was continuing in pharmaceuticals, while the turn-around in consumer sales seemed well under way, as reported by the Financial Times. Ms. Antalffy also shared that the devices and diagnostics division, which has been hampered by price pressures in the U.S., appeared to be stabilizing.
Last week the company reached an agreement with the private equity group Carlyle to sell its ortho-clinical diagnostics unit. The deal is estimated to 4.15 billion dollars and is part of the companys efforts to narrow its focus to growth businesses.
According to CNN Money, the current share price of Johnson & Johnson is 0.31% up, and its one-year return rate is 2.98% up. The 16 analysts offering 12-month price forecasts for Johnson & Johnson have a median target of 98.50, with a high estimate of 108.00 and a low estimate of 88.40. The median estimate represents a 4.43% increase form the last price of 94.32.
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