Johnson & Johnson said Thursday that its growing pharmaceutical business is in a very strong position compared to competitors, with plans to seek approval of 11 new drugs by 2015, the impact of generic competition subsiding and productivity up.
The company, based in New Brunswick, N.J., has had six new drugs approved since 2009 and has two more awaiting approval by regulators. It expects new products and some key existing ones will produce two-thirds of pharmaceutical sales by 2015, according to Vice Chairman Sheri McCoy.
The company has been expanding marketing, research and manufacturing in China, India and other emerging markets, where 60 percent of future global sales growth is expected. But it's still focused on marketing in developed economies, particularly Japan, McCoy told analysts during a daylong review of the health giant's pharmaceutical business, its first review in two years.
"We are returning to growth and we expect to outpace market growth," she said. "We have a revitalized portfolio of differentiated medicines that will make a difference for patients."
Like other drugmakers, J&J said it is focusing on "unmet needs" _ diseases without good treatments _ as most blockbuster drugs for common conditions like blood pressure and cholesterol problems now have much-cheaper generic rivals or will soon.
Johnson & Johnson also is jumping on the industry bandwagon in other areas, such as doing deeper research into disease mechanisms to produce better-targeted drugs and developing related tests to determine how well patients will respond to specific medicines.
It's also focusing on disease prevention, getting into the vaccines business with its Crucell NV purchase this year. It is also trying to develop tests to predict who will develop diseases such as cancer.
The company makes products ranging from baby shampoo to hip and knee replacements. J&J derived $22.4 billion in sales last year from its prescription drugs, more than a third of its total revenue.
J&J is in the process of launching the six recently approved products, including prostate cancer drug Zytiga and Edurant, its third HIV drug, and seeking approval for products including the blood thinner rivaroxaban, a potential blockbuster.
The Food and Drug Administration approved Zytiga on April 29 and cleared Edurant on May 20, and Johnson & Johnson is waiting for regulatory decisions in the European Union.
Telaprevir, one of two groundbreaking new hepatitis C therapies, was approved Monday under the name Incivek by the Food and Drug Administration. J&J partner Vertex Pharmaceuticals Inc. owns the North American rights. Johnson & Johnson has the rights in Europe, where the drug has not yet been approved.
Among the potential big sellers in development are a Type 2 diabetes drug called canagliflozin and bapineuzumab, which could prove to be the first treatment to slow the deterioration of brain function in Alzheimer's disease patients. Both disorders affect hundreds of millions of people worldwide, and those numbers are rising rapidly.
J&J also plans to seek approval of about 30 new uses for drugs recently approved, awaiting approval or in late-stage testing. The company has found that strategy profitable. Its blockbuster immune disorder drug Remicade is approved for 15 uses, including rheumatoid arthritis and Crohn's disease, and successor drug Simponi went on sale in 2009.
As a result, immunology drugs are now J&J's best-selling category, up 18 percent to about $1.6 billion in the first quarter, and the company leads the U.S. market with one-third of sales.
Johnson & Johnson said it is trying to strengthen its business in Japan and plans to launch seven products there this year. Japan is the largest pharmaceutical market in the world after the U.S.
About a quarter of J&J's revenue comes from its consumer products business. That has been battered by about 20 recalls since September 2009 and a year-old closure of one of the factories involved over problems ranging from nauseating odors to metal and glass shards in medicines such as Tylenol and Motrin.
J&J also has recalled some prescription drugs, as well as contact lenses and hip replacements made by its medical device business, which accounts for about 40 percent of its revenue.
"Our consumer business is still working through challenges, and we are confident we will get these resolved," McCoy told the analysts.
Johnson & Johnson shares fell 16 cents to $65.56 in afternoon trading.