Johnson & Johnson - Index

Johnson & Johnson - report - Index

TOPAMAX® (topiramate), which has been approved for
adjunctive and monotherapy use in epilepsy, as well as for the
prophylactic treatment of migraines, achieved $2.5 billion in
sales in 2007, an increase of 21.0% over prior year. The major
contributor to the growth was the continued success in the
migraine category. The patent for TOPAMAX® (topiramate) in
the U.S. will expire in September 2008. The Company is on target
to file for the pediatric extension with the FDA, which if
obtained, would grant market exclusivity in the U.S. until March
2009. In 2007, U.S. sales of TOPAMAX® were $2.0 billion. The
expiration of a product patent or loss of market exclusivity is
likely to result in a significant reduction in sales.
LEVAQUIN® (levofloxacin) and FLOXIN® (ofloxacin)
achieved combined sales of $1.6 billion in 2007, representing
growth of 7.6% over the prior year. This was primarily due to
favorable market growth partially offset by increased competitive
pressure. In March 2007 the FDA granted pediatric
exclusivity in the U.S. for LEVAQUIN®, which will extend the
marketing exclusivity by six months to June 2011.
ACIPHEX®/PARIET® (rabeprazole sodium), a proton pump
inhibitor co-marketed with Eisai Co. Ltd., achieved sales of $1.4
billion in 2007, an increase of 9.5% as compared to prior year.
Growth in the U.S. was due to overall market growth. Growth
outside the U.S. was due to market growth partially offset by
increased competition in certain regions.
DURAGESIC®/Fentanyl Transdermal (fentanyl transdermal
system) sales declined to $1.2 billion in 2007, a reduction of
10.1% from 2006. This decline was the result of the impact of
generic competition in the U.S. and major international markets.
Generic competition in the U.S. began in January 2005.
CONCERTA® (methylphenidate HCl), a product for the treatment
of attention deficit hyperactivity disorder, achieved sales of
$1.0 billion in 2007, representing an increase of 10.5% over 2006.
Although the original CONCERTA® patent expired in 2004, the
FDA has not approved any generic version that is substitutable
for CONCERTA®. Two parties have filed Abbreviated New Drug
Applications (ANDAs) for generic versions of CONCERTA®,
which are pending and may be approved at any time.
The hormonal contraceptive franchise sales declined to
$0.9 billion in 2007, a reduction of 9.0% from 2006. ORTHO
EVRA® (norelgestromin/ethinyl estradiol), the first contraceptive
patch approved by the FDA, experienced a significant decline in
sales as a result of labeling changes and negative media coverage
concerning product safety. The sales decline was also a result of
continued generic competition in oral contraceptives.
Major Medical Devices and Diagnostics Franchise Sales:
In 2007, Other Pharmaceutical sales were $5.4 billion, representing
a growth of 10.9% over prior year. The biggest contributor
to the increase was VELCADE®, a product for the treatment
of multiple myeloma.
In the fiscal fourth quarter of 2007, the Company recorded a
special pre-tax, non-cash charge of $678 million for the writedown
of the intangible asset related to NATRECOR® (nesiritide),
a product for the treatment of patients with acutely decompensated
heart failure who have dyspnea at rest or with minimal
activity. This charge results from revised estimates of future cash
flows from this product primarily due to a recent decline in
NATRECOR® sales trends. The remaining unamortized intangible
value associated with NATRECOR® was $200 million at the end
of 2007. The Company believes that NATRECOR® is an important
clinical option for the treatment of acutely decompensated
heart failure and the product will continue to be marketed by
Scios Inc., a subsidiary of the Company.
During 2007, the Company launched INVEGA™ (paliperidone)
Extended-Release Tablets, in both the U.S. and Europe.
Additionally, in 2007 the Company launched the antibacterial,
DORIBAX™ (doripenem for injection) in the U.S. and the antiretroviral,
PREZISTA™ (darunavir), in Europe. The Company submitted
five new molecular entities for approval: paliperidone
palmitate for schizophrenia in the U.S., ustekinumab, or CNTO
1275, for psoriasis in both the U.S. and Europe, dapoxetine for
premature ejaculation in several countries in Europe, antibacterial
ceftobiprole in the U.S. and Europe and anti-HIV medication,
TMC 125 in the U.S. and Europe. TMC 125 was approved
by the U.S. FDA in January 2008 and will be marketed as
INTELENCE™ (etravirine).
In response to the challenges facing the Pharmaceutical segment
the Company announced a restructuring initiative in 2007.
See Note 22 for additional information regarding the restructuring.
Pharmaceutical segment sales in 2006 were $23.2 billion,
an increase of 4.2% over 2005, with 3.9% of this change due to
operational growth and the remaining 0.3% increase related to
the positive impact of currency. U.S. Pharmaceutical segment
sales were $15.1 billion, an increase of 4.2%. International Pharmaceutical
segment sales were $8.1 billion, an increase of 4.2%,
which included 3.4% of operational growth and 0.8% related to
the positive impact of currency.
MEDICAL DEVICES AND DIAGNOSTICS SEGMENT
The Medical Devices and Diagnostics segment achieved sales
of $21.7 billion in 2007, representing an increase over the prior
% Change
_____________________
(Dollars in Millions) 2007 2006 2005 ’07 vs. ’06 ’06 vs. ’05
DEPUY® $ 4,587 4,105 3,847 11.7% 6.7
ETHICON ENDO-SURGERY® 3,834 3,376 3,105 13.6 8.7
ETHICON® 3,591 3,213 3,092 11.8 3.9
CORDIS® 3,425 4,088 3,982 (16.2) 2.6
LIFESCAN® 2,373 2,074 1,909 14.4 8.6
Vision Care 2,209 1,879 1,694 17.6 10.9
ORTHO-CLINICAL DIAGNOSTICS® 1,642 1,488 1,408 10.3 5.7
Other 75 60 59 25.0 1.7
Total $21,736 20,283 19,096 7.2% 6.2
MANAGEMENT’S DISCUSSION AND ANALY SIS OF RESULT S OF OPERATIONS AND FINANCIAL CONDITION 39