J&J Posts Higher Sales, Earnings – Diversity Helps

However, their prescription drug unit faced the same problems as the rest of the Pharma industry. A smart investment in consumer products is helping hold things together for J and J. The consumer product division was purchased from Pfizer in 2006, which was the company purchased by Pfizer called Warner Lambert a few years prior. That portion I remember well as at the time I was in sales in the transportation industry and for that industry, even the transportation companies liked the business, in other words, they made money from the product too as it was low cost as far as risk with loss and damage, and all palletized at and the time Pfizer already had a pretty sophisticated logistics solution in place that made this all happen, was one of my top accounts and everyone made money all the way around.

By comparison when doing business with an actual J and J warehouse supplying products to hospitals, the risk value was much higher there as far as product contamination and shipping requirements, as one damaged pallet with anything open on the shrink wrap contaminated the entire lot, so even the transportation businesses liked consumer products and yielded greater profits from their end of the supply chain.

In short, the post states the same issue facing all of big Pharma with patents beginning to expire and thinner pipelines, it’s getting harder to make a buck these days and a little diversity can be a saving grace. The furthering of genomics and personalized medicine will very shortly be providing additional impact to the industry as the science of medicine continues to grow. BD

It’s a good time to be selling steady, boring stuff like the over-the-counter medicines people buy at the drugstore through thick and thin. To wit: Johnson & Johnson said this morning that its third quarter earnings, excluding special items, were up 10% to $3.3 billion compared with last year’s second quarter.

The rise was driven largely by sales growth in consumer products, including brands such as Listerine mouthwash and the allergy medicine Zyrtec that J&J acquired when it bought Pfizer’s consumer products division in 2006. (As a prescription drug, Zyrtec was worth over $1 billion a year for Pfizer; J&J now sells it over the counter.)

And in case you were wondering, the “special items” we referred to above mainly referred to a $528 million write down the company took in the third quarter of last year as part of a program to cut jobs at the company.

http://blogs.wsj.com/health/2008/10/14/what-recession-jj-posts-higher-sales-earnings/