Friday, November 18, 2011

BAX Q3 2011

In terms of individual business performance and beginning with BioScience, global BioScience sales of $1.5 billion increased 9% in the third quarter. Excluding foreign currency, BioScience sales increased 4%. Within the product categories, recombinant sales of $552 million grew 5%. Excluding foreign currency, sales declined 1% as growth of 4% in the U.S. was offset by the expected impact from recent tenders and somewhat slower demand across Europe, given strong performance in the previous quarter. On a year-to-date basis, excluding the impact of tenders we discussed, global recombinant sales growth, excluding currency, is in mid single digits consistent with global market demand.
Moving on to Plasma Proteins. Sales in the quarter were $372 million and advanced 8%. Excluding the impact of foreign currency, sales grew 4%. Growth across the various Plasma Proteins was significantly offset by lower albumin sales as a result of temporary supply constraints and delays in the clearance of shipments in China as a result of new testing guidelines that were implemented there late last year. Combined, these 2 items impacted sales in the quarter by approximately $20 million.
Sales in the U.S. improved sequentially across multiple products in the portfolio, including FEIBA, PD Factor VIII and ARALAST, but were down 8% year-over-year driven primarily by the supply constraints of albumin, whereas, international sales climbed 10% driven by strong demand for FEIBA and PD Factor VIII despite certain tender delays in Eastern Europe.
In Antibody Therapy, sales of $380 million increased 13%. Excluding foreign currency, sales were up 11%, driven by a robust demand for GAMMAGARD LIQUID and the launch of SubQ. Growth in this category of 11% also reflects some ongoing benefits related to Octapharma of at least $20 million in the third quarter.
Sales in regenerative medicine, which includes our BioSurgery products, totaled $143 million and increased 10%. Excluding foreign currency, sales increased 5% driven by high single-digit growth of Fibrin Sealants. This performance was offset by lower ACTIFUSE revenues triggered by the temporary disruption in the U.S. channel resulting from the planned transition to a direct sales model from ApaTech's former distributor model that we mentioned last quarter....

JnJ Q3 2011

I will now review the Medical Devices & Diagnostics segment results.
Worldwide Medical Devices & Diagnostics segment sales of $6.3 billion grew 1.7% operationally as compared to the same period in 2010. Currency had a positive impact of 4.4 points, resulting in a total sales increase of 6.1%.
Sales in the U.S. were down 0.7%, while sales outside the U.S. increased on an operational basis by 3.9%. Excluding drug-eluting stent, worldwide sales increased over 3% on an operational basis.....
During the quarter, Ethicon received a complete response letter from the U.S. Food and Drug Administration regarding its Biologics License Application or BLA for the Fibrin Pad. The Fibrin Pad is a novel product candidate that combines Ethicon to biomaterials and plasma-derived Biologics to aid in stopping bleeding during surgery. This BLA marks the first of multiple submissions and approvals the company will pursue to deliver this novel product to surgeons and their patients. We are not planning on conducting new clinical trials to support our response. Ethicon is taking a phased approach to the development of the Fibrin Pad, including building a state-of-the-art facility to scale up supply in order to meet anticipated demand.
Ethicon Endo-Surgery achieved operational growth of 3.4% in the third quarter of 2011, with the U.S. sales down 2.5% and sales outside the U.S. up 7.6% operationally. Growth was driven by increased market share for advanced sterilization products and outside the U.S., new product launches and the continued shift to minimally-invasive surgery drove double-digit growth for harmonic products and strong sales results for Endo products....
Steve Beuchaw - Morgan Stanley, Research Division
We'd always be happy to join you in any of those discussions. One other question. I just wanted to get your latest thoughts, Dominic, on where things are headed with the FDA approval processes, both the 5, 10-Ks in for novel technologies. On one hand it seems like we're seeing an acceleration of legislative activity aimed at making these processes simpler, but then on the other hand we see CMS and the FDA working harder to coordinate approval and reimbursement for new technologies. So at this stage, to what extent do you think these are good indicators of where things might go? Maybe 5, 10-Ks get more predictable, and new technologies get a little bit more scrutiny. Where do you see this going?
Dominic J. Caruso
Yes, it's a great question. Look, we would just be speculating if we gave you sort of any definitive kind of position on this. But it is true that there is a movement to try to differentiate, if you will, the products that should get 5, 10-K and rapid approval in the marketplace because of relatively low risk or they're obviously the predicate devices. It's something that should be comparable to the current device and differentiate those from the products that would require more sort of PMA and extensive clinical trials as the products become or those development innovations become more complex. I think a company like Johnson & Johnson having the expertise that we have across a broad portfolio of not only medical device products, but obviously our pharmaceutical business as well positions us very well to have those kinds of discussions and dialogue with the FDA of what's appropriate in evaluating the particular product in question. So I would just say you've made a good observation. I can't predict where it's going to come or how it's going to come out, but I believe that we're in a great position to have that dialogue with the FDA and help them arrive at a sensible solution for the industry.