J&J sales forecast disappoints as generic, pricing headwinds rise
- Johnson & Johnson doesn't expect rising competition and declining net prices for its medicines to entirely prevent growth this year, yet its forecast for 2019 sales fell noticeably below Wall Street estimates.
- In 2018, prices for J&J drugs after accounting for discounts and rebates decreased between 6% and 8%, company executives said on a conference call Tuesday, and the pharma anticipates elevated net price declines to continue this year. Still, J&J set guidance for 2019 sales to reach between $80.4 billion and $81.2 billion, which would represent operational growth of between 0% and 1%.
- At the same time, the impending impact of generic competition to J&J's top-selling cancer drug Zytiga, as well as biosimilar erosion of Remicade sales in the U.S., have made taller the hurdles facing J&J in its push to maintain growth this year.
Despite the launch of two biosimilar rivals to its blockbuster Remicade (infliximab), J&J has so far been able to evade a major hit to its pharmaceutical business revenue.
Indeed, executives for the pharma told investors on a Tuesday conference call that J&J has maintained approximately 93% of the total share of prescription volume for infliximab — more than two years after Pfizer launched Inflectra (inflixmiab-dyyb) on the U.S. market. (Pfizer is contesting J&J's hold on the infliximab market via a lawsuit contending exclusionary contracting on the part of J&J.)
Still, the competitive impact is beginning to manifest itself in lower Remicade sales. During the last three months of 2018, U.S. sales and U.S. exports of the drug fell below the $1 billion mark for the quarter, dropping by more than a fifth compared to the same period in 2017.
J&J faces more competitive headwinds in 2019, as legal rulings on a key patent protecting the pharma's prostate cancer drug Zytiga (abiraterone acetate) have opened the U.S. market to generic competitors.
All told, the company expects generic and biosimilar headwinds to amount to a $3 billion negative impact.
Sales for Xarelto (rivaroxaban), an anticoagulant and another top-seller, also disappointed, posting a 14% drop in the fourth quarter.
On Tuesday's call, J&J executives touted the company's forecast for operational sales growth despite these factors as evidence of a market-leading pharmaceutical portfolio.
Still, its sales guidance for the year fell well short of Wall Street consensus estimates of $82.6 billion, suggesting the pharma can't completely escape the impact of price and competition in 2019.
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