Competition fears hurt J&J’s price on market

Profit up 27% but shares drop as Pfizer announces plan to launch a drug competitor

Johnson & Johnson shares dropped Tuesday, despite the health-care bellwether boosting its third-quarter profit 27 per cent.

Investors apparently are worried about unexpectedly early competition to the company’s longtime top seller.

The maker of Band-Aids, medical devices and prescription drugs beat Wall Street’s expectations, maintained its 2016 revenue forecast, raised the lower end of its profit forecast and said it’s on track for the approval and launch of 10 new medicines between 2015 and 2020.

But on a conference call after the results were released, analysts peppered J&J executives with questions about how it will prevent Pfizer Inc.’s Inflectra from siphoning off sales of J&J’s biologic immune disorder drug Remicade, which has earned J&J tens of billions of dollars since its 1998 launch.

On the eve of J&J’s results announcement, Pfizer said Monday it will launch a near-copy of the injected biologic drug, called a biosimilar, in late November in the U.S.

Investors are “beginning to price in the competition” to Remicade, driving down J&J’s price, Evans said.

J&J shares fell more than 2 per cent Tuesday.

The world’s biggest maker of health-care products on Tuesday reported a net income of $4.27 billion, or $1.53 per share, up from $3.36 billion, or $1.20 per share, in 2015’s third quarter. Restrained spending and soaring prescription drug sales more than offset a dip in consumer product sales.

Adjusted earnings, which exclude one-time items, amounted to $1.68 per share, three cents better than analysts expected.

The New Brunswick, N.J.-based company posted revenue of $17.82 billion in the quarter, up from $17.1 billion a year ago and above the $17.72 billion analysts expected.

Johnson & Johnson said it expects full-year adjusted earnings in the range of $6.68 to $6.73 per share, up from its July forecast of $6.63 to $6.73 per share.