With first-quarter earnings and post-ASCO excitement over, we're at the time when many pharmaceutical companies host R&D days to discuss the future prospects of their drug development programs. On Thursday, Johnson & Johnson
Key to JNJ's future is its late-stage pipeline, which consists of many drug candidates to treat blockbuster indications. Most exciting are the infectious disease compounds like telaprevir, created by Vertex Pharmaceuticals
As for its marketed drugs, JNJ's pharmaceutical segment sales gained 11% in the first quarter of 2007 after a 4% rise for all of 2006. Its pharma sales could come under pressure due to all of the negativity surrounding its second-best seller, Procrit. The company's top drug, Risperdal Consta, will lose patent protection next year, opening the door for generic competitors. Together these two compounds accounted for nearly a third of JNJ's pharmaceutical sales last year.
The good news for Johnson & Johnson investors is that the rest of its pharmaceutical segment is healthy. Topamax should remain on its blistering double-digit annual sales growth rate and could possibly be the third highest-grossing drug for JNJ by the end of the year. Even in the face of increased competition from Abbott Laboratories'
While there are concerns about other parts of Johnson & Johnson (for example, its medical device segment), its pharmaceutical division has a robust pipeline of compounds in development that should pay off in the long haul. However, investors should still be prepared for some near-term bumpiness with its top-selling drugs.