Johnson & Johnson (JNJ 1.49%) may offer well-known personal care products such as Listerine and Neutrogena, but it also boasts an impressive portfolio of market-leading therapeutic compounds. The health care leader was one of the few to show growth in both worldwide pharmaceutical sales and earnings last year, which grew to $25 billion and $3.86 per share respectively. It finds itself in an enviable position heading into 2013 as one of the best-positioned companies to tackle the patent cliff head on.

Even with the recent success, there is no time to rest on laurels in the highly competitive landscape of pharma and biotech. The industry's most successful drugs are under constant pressure from generics, which are either already on the market or timing their entrance for the moment exclusivity is lost. Luckily, 2012 showed that several new drugs are already shaping up to be critical driving forces in the company's future. Today, we will look at the anti-inflammatory biologic Remicade.

Immunology goes beast mode
Remicade (infliximab) is a monoclonal antibody that targets and suppresses tumor necrosis factor-alpha, or TNF-alpha, which regulates immune cells that induce fever and inflammation when fighting infection or disease. The biologic gained its first approval in 1998 and never looked back.

In fact, it was a major factor in shifting the standard of care in autoimmune disorders from the small molecule methotrexate to stand-alone therapeutic proteins or combinational therapies. It was also the first TNF inhibitor to be approved in three distinct therapies and is now approved for 16 indications. According to the company, Remicade has treated more than 1.5 million patients in the past 17 years.

As you can probably tell, Remicade is easily the leading drug for Johnson & Johnson. Not only does it generate 78% of all biologics revenue, but it also single-handedly topped the sales of the company's total infectious disease and oncology segments in 2012.

Source: SEC filings. Dollar amounts in millions.

A recent battle over Remicade with Merck (MRK 0.44%), which generated just over $2 billion from the biologic last year, decided who had exclusive rights to key markets outside of the United States and how profits would be split elsewhere. Judging by last year's results, it would seem that Johnson & Johnson got the better end of the deal.   

Do you hear footsteps?
Other TNF-alpha inhibitors approved for various indications include Simponi (golimumab) from Johnson & Johnson and Merck; Humira (adalimumab) from AbbVie (ABBV 1.06%); and Enbrel (entanercept) from Amgen (AMGN 2.35%). Due to the scope of approvals granted to various therapeutic proteins, Remicade faces competition in some indications while enjoying exclusive use -- such as orphan drug status for pediatric ulcerative colitis -- in others.  

The tangled web of competition between this group of biologics can be difficult to unravel. Perhaps a better way to quantify the competition is through sales growth. On this basis, Remicade grew 12% last year for Johnson & Johnson, Simponi grew 48%, Enbrel grew 14%, and Humira grew 17%. With double-digit sales growth for each, these biologics are hardly stepping on each other's feet on their way to the bank.   

TNF-alpha production will continue to be targeted by future therapies, so the key to gaining and maintaining market share will come down to improvements in dosing, pricing, or safety. Two areas to watch for up-and-coming competition are JAK inhibitors -- such as Pfizer's (PFE 2.40%) Xeljanz -- and interleukin disrupters -- such as Johnson & Johnson's Stelara. Both have novel mechanisms of action that have shown significant improvements in response over methotrexate (Xeljanz) and even other biologics (Stelara).   

Foolish bottom line
Johnson & Johnson will be able to rely on Remicade as the top bread winner for the next several years. The company has enjoyed several important approvals in recent years and is constantly seeking to invigorate its pipeline.