Biotech Values

[DewDiligence]

Notes from JNJ’s 4Q09 CC

1. For the third consecutive quarter, the medical-device and diagnostics unit outsold the pharma unit, which is in a cyclical low due to the loss of patent exclusivity on two large-selling drugs, Topamax and oral Risperdal.

2. Among the few bright spots in the pharma unit was Prezista, an HIV protease inhibitor launched in 2006; 4Q09 sales leapt 88% YoY (in constant currencies) and 19% QoQ to $179M. Prezista still trials Reyataz (4Q09 sales: $388M, +18% YoY) and Kaletra (4Q09 sales: $378M, -2% YoY), but is catching up quickly.

3. Sales and market share of the Cypher drug-eluting stent stabilized relative to the previous quarter, but that’s the most positive thing one can say about this product, which has been relegated to a third-place ranking behind Xience/Promus and Taxus (#msg-39762286). Worldwide Cypher sales decreased 23% YoY (in constant currencies) to $225M, and increased 7% from the very low level of 3Q09. Cypher’s market share is 12% in the US, 24% ex-US, and 20% overall. The overall DES market is in a state of modest decline as price erosion outweighs the volume gains. For JNJ, Nevo can’t come soon enough (see below).

4. JNJ confirmed the prior guidance for the timing of the Nevo regulatory submissions: 1Q10 in the EU; 2012—maybe—in the US.

5. JNJ has not yet submitted a reply to the FDA’s CRL for Xarelto (#msg-38215847), despite the fact that the prior guidance for this submission was 4Q09. Executives on the CC declined to offer updated guidance about when the Xarelto reply will be submitted.