PFE Pfizer Inc

By Jonathan D. Rockoff and Anne Steele 

Johnson & Johnson on Tuesday sought to reassure investors and analysts that lower-priced competition for one of its top-selling products won't slow a company that posted slightly better-than-expected results in the third quarter.

The health-products company said world-wide sales in the quarter grew by 4.2%, to $17.8 billion. The company reported profit of $4.27 billion, or $1.53 a share, up from $3.36 billion, or $1.20 a share, in the same period a year ago.

Looking ahead, J&J lifted the low end of its financial guidance for the year.

J&J's shares have performed strongly, up 15% this year, propelled by a drugs business that has been delivering new big sellers. But shares fell 2% Tuesday morning as investors digested the announcement from rival Pfizer Inc. late Monday that it planned to challenge J&J's Remicade rheumatoid-arthritis treatment by launching a lower-priced copy, known as a biosimilar, in late November.

Pfizer said its biosimilar, called Inflectra, would list for a price 15% less than Remicade's.

Remicade was J&J's top-selling drug in the quarter, with $1.2 billion in U.S. sales alone. Chief Financial Officer Dominic Caruso said on a conference call that J&J didn't expect its yearly results to be affected by any Inflectra competition.

Analysts say the competition could reduce Remicade sales by $1 billion next year. Yet J&J officials sought to push back on concerns about the impact, especially in the near-term. They noted the company is fighting Inflectra in the courts.

Joaquin Duato, J&J's pharmaceuticals chief, also said the company expected stable Remicade patients to stay on the therapy, and that J&J will compete on price. The discount Pfizer is offering on Inflectra is at the bottom of the range that analysts and payers had expected.

J&J also detailed how new uses for existing medicines and drug launches through 2019 could offset any sales losses and provide new revenue growth.

Mr. Duato said the company is working on 10 line extensions on existing products that could add more than $500 million in sales apiece and 10 new drugs that could have $1 billion or more in sales each.

"We plan to continue to grow our pharmaceuticals business in the face of biosimilar competition," including in the treatment of immunology diseases like the ones treated by Remicade, Mr. Duato said in an interview.

The New Brunswick, N.J., company now expects earnings for the year of $6.68 to $6.73 a share, compared with its previous guidance for $6.63 at the bottom end of the range. It repeated its revenue forecast of $71.5 billion to $72.2 billion.

Prescription-drug sales grew 9.2% to $8.4 billion in the quarter, driven by strength in new products including blood-cancer drug Imbruvica, blood-thinner Xarelto and multiple myeloma therapy Darzalex.

J&J's other segments, however, continued to lag. During the quarter, sales of J&J consumer health products slipped 1.6% to $3.26 billion, dragged down by currency headwinds. Meanwhile, J&J's medical device sales rose just 1.1% to $6.16 billion.

Write to Jonathan D. Rockoff at Jonathan.Rockoff@wsj.com and Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

October 18, 2016 12:28 ET (16:28 GMT)

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