The Thanksgiving holiday didn't give Johnson & Johnson (NYSE:JNJ) a break from bad news. While many of us were stumbling about in a tryptophan stupor, word broke that the pharmaceutical giant had to pull the plug on clinical trials of its drug Procrit due to more blood clotting in patients than expected.

The trials were investigating the use of Procrit, which is already marketed as an anemia drug, to elevate hemoglobin levels to get better results from radiation and chemotherapy for cancer patients.

While clotting may seem like an alarming side effect of an anemia drug -- indeed, the news alarmed some analysts regarding Amgen's (NASDAQ:AMGN) rival anemia medication as well -- the normal dosages used for anemia treatment apparently haven't shown the same negative result.

However, finding another clinical use for Procrit might have helped boost flagging sales, which have suffered due to competition from Amgen's and Roche's anemia treatments.

Earlier last week, the company's stock was dragged down by the similarity of its schizophrenia drug Risperdal to that of Eli Lilly's (NYSE:LLY) Zyprexa. Lilly's drug (and J&J's, by association) was revealed to be about as effective as an old drug for the disease, haloperidol, which is produced by generic drugmakers at reduced prices. And we all know how insurance companies feel about cheaper versions of drugs that are just as effective as the pricey ones.

All this bad news comes on the heels of an advisory letter issued by the Food and Drug Administration in October that notified physicians about blood clotting and deaths associated with J&J's Cypher drug-coated stent. While Dow Jones said Tuesday that the FDA stated that blood clotting is a common side effect of stents of all kinds, the deaths remain unsettling.

Also on Tuesday, Mylan Laboratories (NYSE:MYL) said it plans to launch a generic version of J&J's Duragesic pain medication in July.

While investors may be tempted by J&J's recent low stock prices, the flurry of news last week and in the recent past might warrant some pause. Procrit, Risperdal, and the Cypher stent all represent major products for the company. Procrit alone represented 11.8% of 2002 sales. These developments could shake confidence in the sales potential of these products -- and in J&J's stock.

Tylenol, anyone? Are more headaches on the way for J&J? Discuss with other Fools on the Johnson & Johnson discussion board.

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