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The Journal Gazette

  • Associated Press FILE - This Friday, Oct. 10, 2008, file photo illustration shows Johnson & Johnson products, in Philadelphia. On Tuesday, Oct. 18, 2016, Johnson & Johnson reports financial results.

Tuesday, October 18, 2016 10:01 pm

J&J shares dip as Pfizer plans a biosimilar

LINDA A. JOHNSON | Associated Press

Johnson & Johnson shares dropped Tuesday, despite the health care bellwether boosting its third-quarter profit 27 percent. 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 was able to 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.

Many analysts didn’t expect that competition until 2018 because Pfizer and J&J are still fighting in the courts over whether the U.S. patent protecting Remicade’s monopoly is still valid, said Edward Jones analyst Ashtyn Evans. If Pfizer loses that litigation, it could have to pay J&J three times the U.S. profits it makes on Inflectra, she noted.

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

Remicade, for treating rheumatoid arthritis, psoriasis, Crohn’s disease and colitis, is one of J&J’s most profitable drugs, with sales of $5.34 billion in the first three quarters.

Inflectra will be priced 15 percent less than Remicade’s roughly $2,600 monthly list price and is sure to cut into Remicade sales, as biosimilars have already done in Europe and Canada.

Executives of J&J, the parent company of DePuy Synthes in Warsaw, told the analysts that about 70 percent of patients taking Remicade are doing well and unlikely to change drugs, the company has a strong patient-assistance program and it’s offering sizable discounts to insurers.