USA — Johnson & Johnson, the multinational healthcare company, has reported first-quarter results, with sales growth driven by strong demand for its cancer drugs and other healthcare products in the U.S. market.
Overall US sales surged almost 10% to US$12.52bn in the quarter, while international sales grew by nearly 2%, or over 8% when excluding currency fluctuations.
The company’s pharmaceutical business, which is its largest, saw a 4% growth, with most of the revenue coming from immunology and cancer treatments, such as Darzalex, a blood cancer treatment, and Stelara, which treats psoriasis and other inflammatory disorders.
The impact of a strong US dollar on international sales was lessened by the robust sales of its drugs and medical devices in various international markets.
J&J’s first-quarter earnings totaled US$2.68 per share, surpassing Wall Street expectations for per-share earnings of US$2.50, according to FactSet.
However, the company booked a one-time charge linked to a proposed settlement for lawsuits alleging that its baby powder containing talc causes cancer.
The firm has agreed to allocate almost US$9bn to settle the lawsuits, which more than quadruples the amount the company had previously reserved.
J&J’s first-quarter results also showed that its medical devices sales surged over 7%, to US$7.5bn, following the recent acquisition of cardiovascular technology company Abiomed.
Moreover, J&J’s consumer health business grew by around 7%, with Band-Aids and other products selling well in the U.S. market.
The company announced that it expects to spin off its consumer health business with an initial public offering by the end of this year.
J&J’s board has also approved a 5% increase in its quarterly dividend, rising 6 cents to US$1.19 per share.
The company has also raised the lower end of its projected range for 2023 by 10 cents and now expects operational earnings of between US$10.50 and $10.60 per share.
This forecast is in line with analysts’ expectations for earnings of US$10.51 per share this year.
The company’s medical devices segment, which includes products for knee and hip replacements, also saw growth of more than 7% to US$7.5 billion in the quarter.
Chief Financial Officer Joe Wolk noted that surgical procedures have returned to a steady pace, which is encouraging.
However, the company did incur a US$68 million loss due to a one-time charge related to its baby powder.
J&J pulled the baby powder from U.S. and Canadian store shelves a few years ago and is removing it from worldwide markets this year.
The decision by J&J to withdraw its baby powder from the U.S. and Canadian markets, and ultimately from global markets, has been a significant development in the company’s history.
The move came amid mounting concerns and lawsuits alleging that the talc-based product contained cancer-causing asbestos fibers.
Although the company maintains that its baby powder is safe and asbestos-free, it has decided to take the product off the shelves as a precautionary measure.
The decision has not been without controversy, as some critics argue that J&J should have acted sooner to address the issue.
The company has faced thousands of lawsuits over the years, with plaintiffs alleging that long-term use of the powder caused ovarian cancer or mesothelioma.
The lawsuits have resulted in some high-profile legal battles and hefty payouts, with J&J settling some cases for millions of dollars.
However, J&J has maintained its stance that its baby powder is safe and that it has acted responsibly in removing the product from the market.
The company has also stated that its decision to withdraw the product does not indicate an admission of liability or wrongdoing, and it intends to defend itself against the lawsuits vigorously.
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