Johnson & Johnson - Index

Johnson & Johnson - report - Index

The Company also operates in an environment which has
become increasingly hostile to intellectual property rights.
Generic drug firms have filed ANDAs seeking to market generic
forms of most of the Company’s key pharmaceutical products,
prior to expiration of the applicable patents covering those products.
In the event the Company is not successful in defending the
patent claims challenged in ANDA filings, the generic firms will
then introduce generic versions of the product at issue, resulting
in the potential for substantial market share and revenue losses
for that product. For further information see the discussion on
“Litigation Against Filers of Abbreviated New Drug Applications”
in Note 18.
LEGAL PROCEEDINGS
The Company is involved in numerous product liability cases in
the United States, many of which concern adverse reactions to
drugs and medical devices. The damages claimed are substantial,
and while the Company is confident of the adequacy of
the warnings and instructions for use which accompany such
products, it is not feasible to predict the ultimate outcome of
litigation. However, the Company believes that if any liability
results from such cases, it will be substantially covered by
existing amounts accrued in the Company’s balance sheet
under its self-insurance program and by third-party product
liability insurance.
The Company is also involved in a number of patent, trademark
and other lawsuits, as well as investigations, incidental
to its business. The ultimate legal and financial liability of the
Company in respect to all claims, lawsuits and proceedings
referred to above cannot be estimated with any certainty. However,
in the Company’s opinion, based on its examination of these
matters, its experience to date and discussions with counsel, the
ultimate outcome of legal proceedings, net of liabilities already
accrued in the Company’s balance sheet, is not expected to have
a material adverse effect on the Company’s financial position,
although the resolution in any reporting period of one or more of
these matters could have a significant impact on the Company’s
results of operations and cash flows for that period.
See Note 18 for further information regarding legal
proceedings.
COMMON STOCK MARKET PRICES
The Company’s common stock is listed on the New York Stock
Exchange under the symbol JNJ. The composite market price
ranges for Johnson & Johnson common stock during 2007 and
2006 were:
2007 2006
____________________ ____________________
High Low High Low
First quarter $68.22 59.87 63.10 56.70
Second quarter 65.45 59.95 62.00 57.32
Third quarter 65.75 59.72 65.13 59.68
Fourth quarter 68.75 63.55 69.41 64.50
Year-end close $67.38 66.02
Cautionary Factors That May Affect
Future Results
This Annual Report contains forward-looking statements.
Forward-looking statements do not relate strictly to historical
or current facts and anticipate results based on management’s
plans that are subject to uncertainty. Forward-looking statements
may be identified by the use of words such as “plans,”
“expects,” “will,” “anticipates,” “estimates” and other words of
similar meaning in conjunction with, among other things, discussions
of future operations, financial performance, the Company’s
strategy for growth, product development, regulatory approval,
market position and expenditures.
Forward-looking statements are based on current expectations
of future events. The Company cannot guarantee that
any forward-looking statement will be accurate, although the
Company believes that it has been reasonable in its expectations
and assumptions. Investors should realize that if underlying
assumptions prove inaccurate or that unknown risks or uncertainties
materialize, actual results could vary materially from the
Company’s expectations and projections. Investors are therefore
cautioned not to place undue reliance on any forward-looking
statements. The Company does not undertake to update any forward-looking
statements as a result of new information or future
events or developments.
Risks and uncertainties include general industry conditions
and competition; economic conditions, such as interest rate and
currency exchange rate fluctuations; technological advances,
new products and patents attained by competitors; challenges
inherent in new product development, including obtaining regulatory
approvals; challenges to patents; U.S. and foreign health
care reforms and governmental laws and regulations; trends
toward health care cost containment; increased scrutiny of the
health care industry by government agencies; product efficacy or
safety concerns resulting in product recalls or regulatory action.
The Company’s report on Form 10-K for the year ended
December 30, 2007 includes, in Exhibit 99, a discussion of
additional factors that could cause actual results to differ from
expectations. The Company notes these factors as permitted
by the Private Securities Litigation Reform Act of 1995.
MANAGEMENT’S DISCUSSION AND ANALY SIS OF RESULT S OF OPERATIONS AND FINANCIAL CONDITION 47