Johnson & Johnson (NYSE:JNJ) Future Sealed – New Hepatitis C drug Sales Oust Gilead (NASDAQ:GILD) ’s Sovaldi Leader

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By Jessica Schultz on October 14, 2014 BioPharma, Street Watch

Quarterly earnings revealed by Johnson & Johnson (NYSE:JNJ) beat estimates the main reason for which is the company’s successful sales of the new Hepatitis C drug. It is believed that these sales are soon going to face a challenge from a new treatment that will be easier to use and more effective.

Gilead (NASDAQ:GILD) has been down 4% on fears that their hepatitis c drug won’t compete effectively against Johnson & Johnson (NYSE:JNJ)

This successful U.S. regulators approved drug by Johnson & Johnson (NYSE:JNJ) is called Olysio. Its sales in the second quarter were strong and remained strong in the third quarter in which they were recorded at $796 million.

Things will soon become competitive for Olysio; according to Damien Conover, an analyst of Morningstar. He believes Olysio sales will dwindle after the approval of a new and more potent treatment pill by the name of Harvoni, which has been manufactured by Gilead Sciences Inc. (NASDAQ:GILD); the approval for Harvoni is expected to come this Friday. According to Conover’s estimates, Harvoni’s launch will cause a dip in Olysio’s sales by 50% in 2015.

Despite this upcoming approval Conover believed that Johnson & Johnson (NYSE:JNJ) had strong third quarter results in which sales for its drugs Zytiga (prostate cancer treatment), Xareltos (prevention for blood clots) and Olysio stayed strong. Conover believes that important drugs are selling well and there is a lot of competition for the big players, which is a healthy sign for pharmaceutical stocks.

Harvoni is expected to be an expensive treatment, which will cost $94,500. It is a combination of Gilead’s Sovaldi pill, which costs $84,000, and ledipasvir.

Johnson & Johnson (NYSE:JNJ)’s CFO Dominic Caruso hopes that the company will remain strong in pharmaceutical market and will experiment by combining Olysio with more advance treatment options. He further said that Johnson & Johnson (NYSE:JNJ) does not shy away from investing into this strong market.

According to the company’s quarterly reports drug sales of Johnson & Johnson (NYSE:JNJ) went up by 18% to reach $8.3 billion. However things weren’t this good for the company’s medical devices in the third quarter; their sales went down by 5.2% to reach $6.6 billion. The main reason for this decline in medical devices sales was the disposal of Ortho-Clinical Diagnostics cell of the company along with the recession in economy that caused a decline in surgical procedures. A few consumer products also saw a decline in sales by 0.6% to reach $3.6 billion; these products included Tylenol.

Other Highlights

Johnson & Johnson (NYSE:JNJ)’s third quarter earnings were $4.75 billion ($1.66/share,), which were an improvement from last year’s $2.98 billion ($1.04/share).
Per share earnings for Johnson & Johnson (NYSE:JNJ) were $1.50, which does not include special items. These figures are better than estimates of $1.45/share.
Overall sales for the company jumped up by 5.1%, which is equal to $18.47 billion. This figure also beat estimates, which were $18.38 billion.
Johnson & Johnson (NYSE:JNJ) per share earnings forecast for the full year is between $5.92 and $5.97 per share; these estimates are better than its July forecast that was between $5.85 and $5.92.

Johnson & Johnson (NYSE:JNJ) stock opened today at $100.53.