Johnson & Johnson's Second Quarter: Flight of the Bumblebee Continues

Johnson & Johnson: Second Quarter 2014

• Consumer goods up 2.4%• Devices and diagnostics up

0.9%• Pharmaceuticals rose a

stunning 21.1% -- 36.6% in the US

• Overall 9.1% increase in sales, and a 13.5% EPS boost

• Firing on all cylinders

Johnson & Johnson: Hepatitis C VirusOlysio• Sales reached $831 million despite just 7 months

on the market.• Off-label use in combination with Gilead's Sovaldi

largely responsible for the company's overall upside surprise.

Watch for• Upcoming combination therapies could make

Olysio obsolite• Combos under review from:

– Gilead Sciences– AbbVie

• Combos in late stage development from:– Bristol-Myers Squibb– Merck

Johnson & Johnson: Next-Gen Blood Thinner

Xarelto• First once-daily oral anticoagulant

approved in US.• Second quarter sales rose a whopping

91% year-on-year to $361 million.

Watch for• Safety issues for Boehringer

Ingelheim's Pradaxa and a dissapointing Eliquis launch from partners Bristol-Myers Squibb are playing out well for Xarelto.

• Partnership with Bayer limits share of international sales.

Johnson & Johnson: Type-2 DiabetesInvokana• First-in-class all oral type-2 diabetes

therapy to win FDA approval.• Treats patients no longer responsive

to insulin.• Listed as major growth driver in

earnings release, but sales recorded in "other" category, which fell 1.8% year-on-year to $698 million.

Watch for• AstraZeneca's recently approved

Forxiga and concerns over urinary tract infections

Johnson & Johnson: OncologyImbruvica• Developed in partnership with

Pharmacyclics, this program highlights the company's successful partnering strategy.

• Blockbuster opportunity from chronic lymphoid leukemia indication.

• Pharmacyclics reported net product revenue of $56.2 during latest quarter.

• Beat Glaxo's Arzerra in a head-to-head study

Watch for• Gilead's idelalisib -- currently under FDA

review -- could threaten growth going forward

Johnson & Johnson: A Fool Looks Ahead

• Olysio's contribution likely to decline sharply in 2015

• Invokana, Imbruvica, and even Xarelto still in the early stage of their growth cycles

• Upcoming patent expirations for Remicade and injectible neuroscience therapies might be aleviated by regulartory hurdles for more complex injectible drugs.

Pharmaceuticals:

Devices and diagnostics:• Cost cutting initiatives could

keep growth reletively slow going forward.

Consumer goods:• Baby care, skin care, and over

the counter product sales exhibiting strong growth.

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