Johnson & Johnson rides out patent attack

Profits at Johnson & Johnson have risen in the third quarter, despite deep cuts into pharma sales caused by new generic competition.

Net earnings across the company's divisions rose 1.1% to $3.4 billion, despite a 5.3% dip in turnover to $15.1bn.

This was made possible by savings in its operating costs, including a 10% reduction to sales and marketing costs and 12% being shaved off R&D overheads.

This has helped the company to raise its full year forecast, which cheered investors.

Nevertheless, analysts were concerned by the steep decline seen in some products. Global pharma sales fell 14.1%, as many of its biggest earners suffered from patent loss or declining markets.

Revenue from antipsychotic Risperdal plunged 40% to $192 million as generic competitors entered the US market, where its sales fell a full 70%. The sustained release version of the drug Risperdal Consta fared better, however, with sales rising 4.4% to $353m.

Epilepsy drug Topamax also saw sales drop 76% under generic attack, while anaemia blockbuster Procrit/Eprex fell 12.4% to $542m, as safety warnings and tougher prescribing guidelines continued to reduce demand.

Alzheimer's treatment Reminyl/Razadyne also suffered a hefty blow, sales falling 29.7%, while ADHD therapy Concerta dropped 28.6% to $284m.

Rheumatoid arthritis blockbuster once again provided the good news, with sales rising 5.9% in the period to over $1bn.

Commenting on the results William Weldon, chairman and chief executive, said: "We continue to successfully manage our broad base of businesses and deliver solid earnings despite the impact of patent expirations and the challenges posed by the current economic environment."

During the quarter, the company gained US approval for its new biologic Stelara (ustekinumab) for the treatment of moderate to severe plaque psoriasis, as well as clearance for Invega Sustenna, an extended release of its new antipsychotic.

Simponi (golimumab), a once-monthly, subcutaneous therapy for active rheumatoid arthritis, active and progressive psoriatic arthritis and severe, active ankylosing spondylitis, gained approval in Europe.

The company also bought rights to a new Alzheimer's therapy from Elan, entered a new HIV collaboration with Gilead, and bought a stake in Dutch vaccines firm Crucell.