The world’s biggest maker of healthcare products, Johnson & Johnson, reported a third-quarter profit that beat analysts’ estimates raising its full-year forecast. New drugs continue to help the company grow faster than its competitors.
Johnson & Johnson has introduced eight new medicines since 2011, cementing its place in the pharmaceutical business. The introduction included Xarelto and prostate cancer treatment Zytiga after losing patent protection on two top-selling drugs in 2008 and 2009. Pharmaceutical companies competing with each other are losing exclusivity on products with Pfizer Inc spinning off units and Merck & Co cutting its workforce by 20 percent.
“I’m a firm believer in shots on goal, and that’s something J&J has consistently focused on,” said Judson Clark, an analyst with Edward Jones told Bloomberg Business in a telephone interview. “They aren’t forced to rely on one or two products.”
Read related content:
Johnson & Johnson is the first major U.S. drug maker to release its third-quarter results. Soon to follow will be Bristol-Myers Squibb Co. and Eli Lilly & Co reporting on October 23, Merck on October 28 and Pfizer on October 29.
Prescription drugs sales had a 9.9 percent increase to $7 billion, pulling ahead of medical devices and diagnostic units, which are typically the company’s biggest sellers.
The Affordable Care Act will cost Johnson & Johnson about $1 billion this year according to Tony Butler, an analyst with Barclays, Plc. The law that intends to provide health coverage for roughly 48 million uninsured Americans will weigh on the company because of rebates in the government’s Medicaid program for the poor, drug cost cuts in the Medicare program for the elderly, and a 2.3 percent excise tax on medical device sales according to Bloomberg.