J&J could reopen closed factory, revive OTC business
- In 2010, quality-control problems led Johnson & Johnson (J&J) to close a Pennsylvania-based factory where OTC meds were manufactured. The company was forced to recall 135 million bottles of Tylenol.
- J&J has spent tens of millions of dollars upgrading the plant and is awaiting word from the FDA -- which has already re-inspected the plant -- about when it can reopen.
- J&J had a challenging Q2 2015, with an 8.8% decline in quarter-over-quarter revenues.
J&J's CEO Alex Gorsky is optimistic about reopening the Fort Washington, PA-based plant, where OTC meds have traditionally been manufactured. It's been a while coming, since the height of the most recent problems occured in 2010 when J&J was forced to recall 135 milion bottles of Tyleonol after tiny metal particles were found floating in the children's formulation.
Although J&J had a challenging second quarter, pharmaceutical sales were largely strong. The weakest links---medical devices and the OTC business---were affected by a strong dollar, as well as other factors.
For the most part, J&J's consumer business has recovered, with 80% of recalled brands returning to the market. The only challenge now is not whether the plant is compliant with cGMP, but when the FDA will put allow it to reopen. That could be any day -- or months from now.