Johnson & Johnson has suffered setback during the third quarter ended September 2007 and its net profit declined by 7.7 per cent to US $2.5 billion. Its net earnings for the third quarter included an after-tax restructuring charge of US $528 million associated with the cost improvement programme previously announced on July 31st.
Prior- year third-quarter net earnings included after-tax in-process research and development charges of US $115 million associated with the acquisitions of Ensure Medical, Inc. and Colbar LifeScience Ltd. Excluding the impact of these charges, net earnings for the current quarter were US $3.1 billion and diluted earnings per share were US $1.06, representing increases of 7.0 per cent and 8.2 per cent, respectively, as compared to the same period in 2006.
The company's sales reached at US $15.0 billion during the third quarter of 2007, an increase of 12.7 per cent as compared to the third quarter of 2006. Domestic sales were up 5.8 per cent, while international sales increased 21.5 per cent, reflecting operational growth of 14.7 per cent and a positive currency impact of 6.8 per cent. On a pro-forma basis, including the net impact of the acquisition of Pfizer Consumer Healthcare in both periods, worldwide sales increased 2.4 per cent operationally.
"We continue to deliver solid earnings while investing in the future growth of our business," said William C Weldon, chairman and chief executive officer. "Our broad base enables us to pursue opportunities while managing through pressures in certain markets".
Worldwide Medical Devices and Diagnostics sales of US $5.2 billion for the third quarter represented a 6.0 per cent increase over the prior year with operational growth of 3.0 per cent and a positive impact from currency of 3.0 per cent. Domestic sales increased 2.4 per cent, while international sales increased 9.8 per cent (3.7 per cent from operations and 6.1 per cent from currency).
Primary contributors to the operational growth included Vistakon's disposable contact lenses; LifeScan's blood glucose monitoring and insulin delivery products; DePuy's orthopaedic joint reconstruction and sports medicine products; Ethicon Endo-Surgery's minimally invasive products; and Ortho-Clinical Diagnostics' professional diagnostic products. Also contributing to the results was strong growth in Biosense Webster's electrophysiology business and in Ethicon's wound care and women's health businesses. Growth was impacted by lower sales of drug-eluting stents in our Cordis franchise primarily due to a decline in the market versus the prior year.
During the quarter, the company has received approval from the US Food and Drug Administration (FDA) for the Realize Adjustable Gastric Band, a surgical implant for the treatment of morbid obesity. The FDA also approved the Genesearch Breast Lymph Node Assay, which is the first intra-operative and gene-based test to detect the spread of breast cancer into the lymph nodes.
Worldwide Pharmaceutical sales of US $6.1 billion for the third quarter represented an increase over the prior year of 3.7 per cent with operational growth of 1.2 per cent and a positive impact from currency of 2.5 per cent. domestic sales decreased 2.0 per cent, while international sales increased 14.4 per cent.
Sales growth reflects the strong performance of Topamax, an antiepileptic and a treatment for the prevention of migraine headaches; our antipsychotic franchise, which includes Risperdal, Risperdal Consta and Invega; and Remicade, a biologic approved for the treatment of a number of immune mediated inflammatory diseases. Growth was impacted by lower sales of Procrit, a product for the treatment of anaemia, primarily due to a decline in the market. This market decline is related to a labeling change made this past March and a decision memorandum issued by the Centres for Medicare and Medicaid Services under its national coverage analysis process.