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3 Drug Firms' Earnings Better Than Expected

Company Town

October 17, 2001|Bloomberg News

Johnson & Johnson Inc., Forest Laboratories Inc. and Biogen Inc. had better-than-expected quarterly profit as sales rose for drugs to treat conditions such as anemia, depression and multiple sclerosis.

Johnson & Johnson's net income rose 16%, driven by sales of the Procrit anemia drug and medical devices for heart procedures. Forest Labs' net income surged 55% on sales of the antidepressant Celexa, and demand for Biogen's MS drug Avonex pushed the biotechnology company's profit up 2%.

Pharmaceutical companies have sustained earnings growth on demand for medicines to treat chronic conditions, while slowing consumer spending crimps profit in other industries.

Johnson & Johnson, Forest and Biogen also face less competition from cheaper generics than some other drug companies, allowing them to charge full price for brand-name products.

Johnson & Johnson shares rose $1.05 to close at $56.77, and Forest Labs fell $5.61 to $74.67, both on the New York Stock Exchange. Shares of Biogen fell 94 cents to close at $55.55 on Nasdaq.

Net income at Johnson & Johnson rose to $1.53 billion, or 49 cents a share, from $1.32 billion, or 43 cents, a year earlier. Sales rose 11% to $8.24 billion.

Excluding $24 million, or about 1 cent a share, in costs stemming from the $14-billion acquisition of Alza Corp., New Brunswick, N.J.-based Johnson & Johnson said it would have reported profit of $1.55 billion, or 50 cents a share, beating the 48-cent average estimate of analysts polled by Thomson Financial/First Call.

Johnson & Johnson said it expects to earn $1.90 a share for all of 2001, higher than the average First Call estimate of $1.88.

Forest's net income for the quarter ended Sept. 30 rose to $80 million, or 43 cents a share, from $51.7 million, or 28 cents, a year earlier, the company said. The New York-based drug maker was expected to earn 41 cents a share, the average estimate of analysts surveyed by First Call.

Sales rose 34% to $376.3 million from $281 million. Sales of Celexa, a drug Forest licenses from Denmark's H. Lundbeck, rose to $256.1 million from $168.6 million.

Forest is expected to earn $1.67 a share in the fiscal year ending in March, according to First Call estimates.

Cambridge, Mass.-based Biogen's net income rose to $69.8 million, or 46 cents a share, from $68.4 million, or 44 cents, a year earlier. Results beat the 44-cent average estimate of analysts surveyed by First Call.

Revenue, including royalties, rose 13% to $265.2 million from $233.8 million.

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