/Johnson & Johnson Reports 2010 Third-Quarter Results:

NEWS

Johnson & Johnson Reports 2010 Third-Quarter Results:

FiercePharma

2010/10/19

Sales of $15.0 Billion Decreased 0.7% Versus 2009 Third-Quarter; EPS of $1.23 increased 2.5% Versus 2009 Third-Quarter

NEW BRUNSWICK, N.J., Oct. 19 /PRNewswire-FirstCall/ -- Johnson & Johnson (NYSE: JNJ) today announced sales of $15.0 billion for the third quarter of 2010, a decrease of 0.7% as compared to the third quarter of 2009. Operational results increased 0.1% and the negative impact of currency was 0.8%. Domestic sales declined 2.5%, while international sales increased 1.1%, reflecting operational growth of 2.6% and a negative currency impact of 1.5%.

Net earnings and diluted earnings per share for the third quarter of 2010 were $3.4 billion and $1.23, respectively, representing increases of 2.2% and 2.5%, as compared to the same period in 2009.

The Company raised its earnings guidance for full-year 2010 to $4.70 - $4.80 per share, reflecting recent currency exchange rates. The Company's guidance excludes the impact of special items.

"We continue to deliver solid earnings while investing in our future through complementary strategic partnerships and acquisitions," said William C. Weldon, Chairman and Chief Executive Officer. "Our pharmaceutical business has returned to growth this year and we continue to advance our pipeline with promising clinical data in key therapeutic areas. We are pleased with the strong performance of newly launched products in both our pharmaceutical and medical device and diagnostics businesses."

Worldwide Consumer sales of $3.6 billion for the third quarter represented a decrease of 10.6% versus the prior year consisting of an operational decline of 10.2% and a negative impact from currency of 0.4%. Domestic sales decreased 24.5%; international sales decreased 0.3%, which reflected an operational increase of 0.4% and a negative currency impact of 0.7%.

Positive contributors to operational results were Dabao skin care products, baby care products, and international sales of anti-smoking aids. Sales were significantly impacted by the previously announced recalls of certain over-the-counter medicines and the suspension of manufacturing at the McNeil Consumer Healthcare Fort Washington, Pa., facility as well as the currency devaluation in Venezuela. With respect to the ongoing remediation actions at the Fort Washington facility, Mr. Weldon stated, "We have made considerable progress, and are working diligently to reopen what will be a state of the art facility. Working across our production network, we have begun restoring the supply of some of the impacted children's medicines, which will increase in the coming months."

Worldwide Pharmaceutical sales of $5.5 billion for the third quarter represented an increase of 4.7% versus the prior year with operational growth of 5.9% and a negative impact from currency of 1.2%. Domestic sales increased 6.9%; international sales increased 2.0%, which reflected an operational increase of 4.6% and a negative currency impact of 2.6%.

Several products had strong operational growth including sales of REMICADE® (infliximab), a biologic approved for the treatment of a number of immune mediated inflammatory diseases; PREZISTA® (darunavir), a treatment for HIV; international sales of RISPERDAL® CONSTA® (risperidone) Long-Acting Treatment, an antipsychotic medication; INTELENCE**®** (etravirine), a next generation non-nucleoside reverse transcriptase inhibitor for HIV; and VELCADE® (bortezomib), a treatment for multiple myeloma.

Sales growth also includes the strong performance of newly launched products including STELARA™ (ustekinumab), a biologic approved for the treatment of moderate to severe plaque psoriasis; SIMPONI™ (golimumab), a biologic approved to treat adults with moderate to severe rheumatoid arthritis, psoriatic arthritis, and ankylosing spondylitis; and INVEGA® SUSTENNA™ (paliperidone palmitate), an extended-release injectable suspension for the acute and maintenance treatment of schizophrenia in adults.

During the quarter, the Company submitted new drug applications for TMC 278, a once-daily investigational non-nucleoside reverse transcriptase inhibitor (NNRTI) for the treatment of HIV, to the U.S. Food and Drug Administration and the European Medicines Agency. A supplemental Biologics License Application was also filed in the U.S. to expand the SIMPONI® (golimumab) label in rheumatoid arthritis (RA) to include inhibiting the progression of structural damage in the treatment of moderately to severely active RA.

In October, the Company entered into an agreement to acquire all outstanding equity of Crucell N.V. not already owned by the Company for approximately euro 1.75 billion in a cash tender offer. Crucell is a global biopharmaceutical company focused on the research & development, production and marketing of vaccines and antibodies against infectious disease worldwide.

Worldwide Medical Devices and Diagnostics sales of $5.9 billion for the third quarter represented an increase of 1.3% versus the prior year consisting of an operational increase of 1.9% and a negative currency impact of 0.6%. Domestic sales increased 1.2%; international sales increased 1.4%, which reflected an operational increase of 2.6% and a negative currency impact of 1.2%.

Primary contributors to operational growth included Ethicon's surgical care products; Ethicon Endo-Surgery's minimally invasive and advanced sterilization products; Biosense Webster's electrophysiology business; and DePuy's orthopaedic joint reconstruction business. This growth was partially offset by lower sales in the Cordis franchise, reflecting continued competition in the drug-eluting stent market.

During the quarter, the Company completed the acquisition of Micrus Endovascular, a global developer and manufacturer of minimally invasive devices for the treatment of hemorrhagic and ischemic stroke.

About Johnson & Johnson

Caring for the world, one person at a time... inspires and unites the people of Johnson & Johnson. We embrace research and science - bringing innovative ideas, products and services to advance the health and well-being of people. Our approximately 114,000 employees at more than 250 Johnson & Johnson companies work with partners in health care to touch the lives of over a billion people every day, throughout the world.

NOTE TO INVESTORS

Johnson & Johnson will conduct a meeting with financial analysts to discuss this news release today at 8:30 a.m., Eastern Time. A simultaneous webcast of the meeting for investors and other interested parties may be accessed by visiting the Johnson & Johnson website at www.investor.jnj.com. A replay and podcast will be available approximately two hours after the live webcast by visiting www.investor.jnj.com.

Copies of the financial schedules accompanying this press release are available at www.investor.jnj.com/historical-sales.cfm. These schedules include supplementary sales data, a condensed consolidated statement of earnings, and sales of key products/franchises. Additional information on Johnson & Johnson, including a pharmaceutical pipeline of selected compounds in late stage development and medical devices and diagnostics pipeline of selected products, can be found on the Company's website at www.jnj.com

(This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or unknown risks or uncertainties materialize, actual results could vary materially from Johnson & Johnson's expectations and projections. Risks and uncertainties include general industry conditions and competition; economic conditions, such as interest rate and currency exchange rate fluctuations; technological advances and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approvals; domestic and foreign health care reforms and governmental laws and regulations; and trends toward health care cost containment. A further list and description of these risks, uncertainties and other factors can be found in Exhibit 99 of Johnson & Johnson's Annual Report on Form 10-K for the fiscal year ended January 3, 2010. Copies of this Form 10-K, as well as subsequent filings, are available online at www.sec.gov, www.jnj.com or on request from Johnson & Johnson. Johnson & Johnson does not undertake to update any forward-looking statements as a result of new information or future events or developments.)

Johnson & Johnson and Subsidiaries

Supplementary Sales Data

(Unaudited; Dollars in Millions)

THIRD QUARTER

NINE MONTHS

Percent Change

2010

2009

Total

Operations

Currency

2010

2009

Total

Operations

Currency

Sales to customers by segment of business

Consumer

U.S.

$ 1,277

1,691

(24.5)

$ 4,300

5,125

(16.1)

International

2,290

2,298

(0.3)

0.4

(0.7)

6,680

6,429

3.9

0.5

3.4

3,567

3,989

(10.6)

(10.2)

(0.4)

10,980

11,554

(5.0)

(6.9)

1.9

Pharmaceutical

U.S.

3,054

2,857

6.9

9,370

9,703

(3.4)

International

2,441

2,392

2.0

4.6

(2.6)

7,316

6,824

7.2

5.3

1.9

5,495

5,249

4.7

5.9

(1.2)

16,686

16,527

1.0

0.2

0.8

Med Devices & Diagnostics

U.S.

2,800

2,766

1.2

8,551

8,194

4.4

International

3,120

3,077

1.4

2.6

(1.2)

9,726

9,071

7.2

4.5

2.7

5,920

5,843

1.3

1.9

(0.6)

18,277

17,265

5.9

4.5

1.4

U.S.

7,131

7,314

(2.5)

22,221

23,022

(3.5)

International

7,851

7,767

1.1

2.6

(1.5)

23,722

22,324

6.3

3.7

2.6

Worldwide

$ 14,982

15,081

(0.7)

0.1

(0.8)

$ 45,943

45,346

1.3

0.0

1.3

Johnson & Johnson and Subsidiaries

Supplementary Sales Data

(Unaudited; Dollars in Millions)

THIRD QUARTER

NINE MONTHS

Percent Change

2010

2009

Total

Operations

Currency

2010

2009

Total

Operations

Currency

Sales to customers by geographic area

U.S.

$ 7,131

7,314

(2.5)

$ 22,221

23,022

(3.5)

Europe

3,629

3,879

(6.4)

1.8

(8.2)

11,563

11,522

0.4

2.6

(2.2)

Western Hemisphere excluding U.S.

1,424

1,338

6.4

1.7

4.7

4,079

3,615

12.8

2.5

10.3

Asia-Pacific, Africa

2,798

2,550

9.7

4.1

5.6

8,080

7,187

12.4

5.9

6.5

International

7,851

7,767

1.1

2.6

(1.5)

23,722

22,324

6.3

3.7

2.6

Worldwide

$ 14,982

15,081

(0.7)

0.1

(0.8)

$ 45,943

45,346

1.3

0.0

1.3

Johnson & Johnson and Subsidiaries

Condensed Consolidated Statement of Earnings

(Unaudited; in Millions Except Per Share Figures)

THIRD QUARTER

2010

2009

Percent

Percent

Increase

Amount

to Sales

Amount

to Sales

(Decrease)

Sales to customers

$ 14,982

100.0

$ 15,081

100.0

(0.7)

Cost of products sold

4,594

30.7

4,434

29.4

3.6

Selling, marketing and administrative expenses

4,709

31.4

4,767

31.6

(1.2)

Research expense

1,657

11.1

1,617

10.7

2.5

Interest (income)expense, net

0.6

114

0.7

Other (income)expense, net

(292)

(2.0)

(96)

(0.6)

Earnings before provision for taxes on income

4,219

28.2

4,245

28.2

(0.6)

Provision for taxes on income

802

5.4

900

6.0

(10.9)

Net earnings

$ 3,417

22.8

$ 3,345

22.2

2.2

Net earnings per share (Diluted)

$ 1.23

$ 1.20

2.5

Average shares outstanding (Diluted)

2,786.4

2,793.0

Effective tax rate

19.0

21.2

Johnson & Johnson and Subsidiaries

Condensed Consolidated Statement of Earnings

(Unaudited; in Millions Except Per Share Figures)

NINE MONTHS

2010

2009

Percent

Percent

Increase

Amount

to Sales

Amount

to Sales

(Decrease)

Sales to customers

$ 45,943

100.0

$ 45,346

100.0

1.3

Cost of products sold

13,752

29.9

13,135

29.0

4.7

Selling, marketing and administrative expenses

14,244

31.0

14,172

31.3

0.5

Research expense

4,862

10.6

4,773

10.5

1.9

Interest (income)expense, net

234

0.5

280

0.6

Other (income)expense, net

(1,868)

(4.0)

(165)

(0.4)

Earnings before provision for taxes on income

14,719

32.0

13,151

29.0

11.9

Provision for taxes on income

3,327

7.2

3,091

6.8

7.6

Net earnings

$ 11,392

24.8

$ 10,060

22.2

13.2

Net earnings per share (Diluted)

$ 4.08

$ 3.61

13.0

Average shares outstanding (Diluted)

2,792.0

2,787.9

Effective tax rate

22.6

23.5

Adjusted earnings before provision for taxes and net earnings

Earnings before provision for taxes on income

$ 13,379

(1)

29.1

$ 13,151

29.0

1.7

Net earnings

$ 10,415

(1)

22.7

$ 10,060

22.2

3.5

Net earnings per share (Diluted)

$ 3.73

(1)

$ 3.61

3.3

Effective tax rate

22.2

23.5

(1)The difference between as reported earnings and as adjusted earnings before provision for taxes on income, net earnings and net earnings per share (diluted) is the exclusion of income from net litigation of $1,340 million, $977 million and $0.35 per share, respectively.

REPORTED SALES vs. PRIOR PERIOD ($MM)

THIRD QUARTER

NINE MONTHS

% Change

2010

2009

Reported

Operational (1)

Currency

2010

2009

Reported

Operational (1)

Currency

CONSUMER SEGMENT (2)

SKIN CARE

311

370

-15.9%

1,185

1,204

-1.6%

Intl

489

472

3.6%

3.7%

-0.1%

1,378

1,313

5.0%

2.0%

3.0%

800

842

-5.0%

-4.9%

-0.1%

2,563

2,517

1.8%

0.2%

1.6%

BABY CARE

104

102

2.0%

306

308

-0.6%

Intl

462

442

4.5%

3.6%

0.9%

1,326

1,233

7.5%

3.3%

4.2%

566

544

4.0%

3.3%

0.7%

1,632

1,541

5.9%

2.5%

3.4%

ORAL CARE

164

187

-12.3%

486

549

-11.5%

Intl

220

223

-1.3%

-2.2%

0.9%

651

612

6.4%

1.3%

5.1%

384

410

-6.3%

-6.8%

0.5%

1,137

1,161

-2.1%

-4.8%

2.7%

OTC/NUTRITIONALS

438

732

-40.2%

1,472

2,137

-31.1%

Intl

671

666

0.8%

3.5%

-2.7%

1,985

1,919

3.4%

0.7%

2.7%

1,109

1,398

-20.7%

-19.4%

-1.3%

3,457

4,056

-14.8%

-16.1%

1.3%

WOMEN'S HEALTH

121

142

-14.8%

404

443

-8.8%

Intl

338

360

-6.1%

-5.1%

-1.0%

990

963

2.8%

-0.4%

3.2%

459

502

-8.6%

-7.9%

-0.7%

1,394

1,406

-0.9%

-3.1%

2.2%

WOUND CARE/OTHER

139

158

-12.0%

447

484

-7.6%

Intl

110

135

-18.5%

0.0%

350

389

-10.0%

-13.9%

3.9%

249

293

-15.0%

0.0%

797

873

-8.7%

-10.4%

1.7%

TOTAL CONSUMER

1,277

1,691

-24.5%

4,300

5,125

-16.1%

Intl

2,290

2,298

-0.3%

0.4%

-0.7%

6,680

6,429

3.9%

0.5%

3.4%

3,567

3,989

-10.6%

-10.2%

-0.4%

10,980

11,554

-5.0%

-6.9%

1.9%

See footnotes on last page

PHARMACEUTICAL SEGMENT (2) (6)

ACIPHEX/PARIET

116

131

-11.5%

356

397

-10.3%

Intl

124

130

-4.6%

0.8%

-5.4%

398

387

2.8%

2.0%

0.8%

240

261

-8.0%

-5.3%

-2.7%

754

784

-3.8%

-4.2%

0.4%

CONCERTA

214

205

4.4%

668

707

-5.5%

Intl

7.6%

9.3%

-1.7%

283

238

18.9%

14.3%

4.6%

299

284

5.3%

5.8%

-0.5%

951

945

0.6%

-0.6%

1.2%

DURAGESIC/FENTANYL TRANSDERMAL

10.5%

117

163

-28.2%

Intl

142

168

-15.5%

-14.2%

-1.3%

435

492

-11.6%

-13.4%

1.8%

184

206

-10.7%

-9.6%

-1.1%

552

655

-15.7%

-17.1%

1.4%

LEVAQUIN/FLOXIN

274

294

-6.8%

926

1,045

-11.4%

Intl

-29.4%

-31.5%

2.1%

-41.5%

-44.2%

2.7%

286

311

-8.0%

-8.1%

0.1%

957

1,098

-12.8%

-12.9%

0.1%

PREZISTA

102

30.8%

290

215

34.9%

Intl

128

75.3%

82.7%

-7.4%

331

198

67.2%

66.8%

0.4%

230

151

52.3%

55.9%

-3.6%

621

413

50.4%

50.2%

0.2%

PROCRIT/EPREX

204

299

-31.8%

800

950

-15.8%

Intl

202

243

-16.9%

-11.9%

-5.0%

655

719

-8.9%

-9.2%

0.3%

406

542

-25.1%

-22.9%

-2.2%

1,455

1,669

-12.8%

-12.9%

0.1%

REMICADE

857

822

4.3%

2,420

2,330

3.9%

US Exports (3)

365

208

75.5%

1,106

821

34.7%

Intl

16.7%

26.7%

0.0%

1,229

1,036

18.6%

3,545

3,166

12.0%

RISPERDAL/RISPERIDONE

(2)

-105.7%

(14)

223

-106.3%

Intl

123

157

-21.7%

-22.8%

1.1%

390

483

-19.3%

-21.7%

2.4%

121

192

-37.0%

-37.9%

0.9%

376

706

-46.7%

-48.4%

1.7%

RISPERDAL CONSTA

108

129

-16.3%

340

386

-11.9%

Intl

270

224

20.5%

26.6%

-6.1%

772

640

20.6%

20.3%

0.3%

378

353

7.1%

11.0%

-3.9%

1,112

1,026

8.4%

8.2%

0.2%

TOPAMAX

-36.1%

162

642

-74.8%

Intl

103

-21.4%

-18.1%

-3.3%

255

317

-19.6%

-20.5%

0.9%

127

175

-27.4%

-25.4%

-2.0%

417

959

-56.5%

-56.8%

0.3%

VELCADE

0.0%

Intl

246

231

6.5%

10.1%

-3.6%

793

652

21.6%

20.3%

1.3%

246

231

6.5%

10.1%

-3.6%

793

652

21.6%

20.3%

1.3%

OTHER

728

546

33.3%

2,199

1,824

20.6%

Intl

1,021

961

6.2%

7.4%

-1.2%

2,954

2,630

12.3%

9.4%

2.9%

1,749

1,507

16.1%

16.9%

-0.8%

5,153

4,454

15.7%

14.0%

1.7%

TOTAL PHARMACEUTICAL

3,054

2,857

6.9%

9,370

9,703

-3.4%

Intl

2,441

2,392

2.0%

4.6%

-2.6%

7,316

6,824

7.2%

5.3%

1.9%

5,495

5,249

4.7%

5.9%

-1.2%

16,686

16,527

1.0%

0.2%

0.8%

MAJOR NEW PHARM PRODUCTS (4)

INVEGA

3.3%

200

194

3.1%

Intl

-2.8%

1.7%

-4.5%

108

16.1%

15.2%

0.9%

1.0%

2.7%

-1.7%

308

287

7.3%

7.0%

0.3%

See footnotes on last page

MEDICAL DEVICES AND DIAGNOSTICS (2)

CORDIS (5)

246

233

5.6%

762

731

4.2%

Intl

350

407

-14.0%

-13.5%

-0.5%

1,161

1,251

-7.2%

-9.4%

2.2%

596

640

-6.9%

-6.6%

-0.3%

1,923

1,982

-3.0%

-4.4%

1.4%

DEPUY

748

740

1.1%

2,338

2,268

3.1%

Intl

561

544

3.1%

4.8%

-1.7%

1,800

1,631

10.4%

7.3%

3.1%

1,309

1,284

1.9%

2.6%

-0.7%

4,138

3,899

6.1%

4.8%

1.3%

DIABETES CARE

338

332

1.8%

941

908

3.6%

Intl

275

302

-8.9%

0.2%

-9.1%

885

877

0.9%

2.1%

-1.2%

613

634

-3.3%

1.0%

-4.3%

1,826

1,785

2.3%

2.9%

-0.6%

ETHICON

480

439

9.3%

1,499

1,296

15.7%

Intl

592

580

2.1%

3.4%

-1.3%

1,852

1,717

7.9%

5.3%

2.6%

1,072

1,019

5.2%

6.0%

-0.8%

3,351

3,013

11.2%

9.7%

1.5%

ETHICON ENDO-SURGERY

484

499

-3.0%

1,474

1,442

2.2%

Intl

653

607

7.6%

8.4%

-0.8%

2,027

1,794

13.0%

9.9%

3.1%

1,137

1,106

2.8%

3.3%

-0.5%

3,501

3,236

8.2%

6.5%

1.7%

ORTHO-CLINICAL DIAGNOSTICS

263

285

-7.7%

815

846

-3.7%

Intl

235

216

8.8%

9.2%

-0.4%

702

616

14.0%

11.1%

2.9%

498

501

-0.6%

-0.4%

-0.2%

1,517

1,462

3.8%

2.6%

1.2%

VISION CARE

241

238

1.3%

722

703

2.7%

Intl

454

421

7.8%

4.0%

3.8%

1,299

1,185

9.6%

4.9%

4.7%

695

659

5.5%

3.1%

2.4%

2,021

1,888

7.0%

4.0%

3.0%

TOTAL MEDICAL DEVICES AND DIAGNOSTICS

2,800

2,766

1.2%

8,551

8,194

4.4%

Intl

3,120

3,077

1.4%

2.6%

-1.2%

9,726

9,071

7.2%

4.5%

2.7%

5,920

5,843

1.3%

1.9%

-0.6%

18,277

17,265

5.9%

4.5%

1.4%

(1)Operational growth excludes the effect of currency

(2)Select areas (unaudited)

(3)Reported in U.S. sales

(4)Included in Other

(5)Includes sales of Drug-Eluting Stents for Q3 2010 of $47, $89 and $136MM Domestic, International and Worldwide respectively

Includes sales of Drug-Eluting Stents for Q3 2009 of $53, $158 and $211MM Domestic, International and Worldwide respectively

Includes sales of Drug-Eluting Stents for September YTD 2010 of $166, $327 and $493MM Domestic, International and Worldwide respectively

Includes sales of Drug-Eluting Stents for September YTD 2009 of $189, $507 and $696MM Domestic, International and Worldwide respectively

(6)Conforms to current presentation

SOURCE Johnson & Johnson

Summary

Sales of 15.0BillionDecreased0.71.23 increased 2.5% Versus 2009 Third-QuarterNEW BRUNSWICK, N.J., Oct. 19 /PRNewswire-FirstCall/ -- Johnson & Johnson