Johnson & Johnson: Managing For The Long Term

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To meet performance objectives, J&J developed a set of near-term priorities for each business segment that will allow the company to achieve long-term growth.

 

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Johnson & Johnson

One Johnson & Johnson Plaza
New Brunswick, NJ 08933
Telephone: 732-524-0400
Website: jnj.com

 

 

 

Best-Selling Rx Products

Product 2015 Sales 2014 Sales
Remicade

$6,561

$6,868

Stelara

$2,474  $2,072
Zytiga

$2,231

$2,237

Xarelto

$1,868

$1,522

Invega Sustenna/Xeplion,

Invega Trinza

$1,830

$1,588

Prezista,

Prezcobix/Rezolsta

$1,810

$1,831

Velcade

$1,333

$1,618

Simponi, Simponi Aria

$1,328

$1,187  

Invokana, Invokamet

$1,308   

$586

Procrit/Eprex

$1,068

$1,238

Risperdal Consta

$970

$1,190

Concerta/methylphenidate $821

$599

Imbruvica    $689    $200

Olysio/Sovriad 

$621

$2,302

Invega/paliperidone

$573

$640

Edurant $410 $365 

All sales are in millions of dollars.

 

 

 

Financial Performance

  2015 2014
Revenue

$70,074

$74,331

Net income

$15,409

$16,323

Diluted EPS

$5.48

$5.70

R&D expense

$9,046

$8,494

  1H16 1H15
Revenue

$35,964

 $35,161

Net income

$8,454

$8,836

Diluted EPS

$3.02

$3.13

R&D expense

$4,277

$4,028

All sales are in millions of dollars except
earnings per share.

 

 

 

 

During the past decade, Johnson & Johnson has supported organic growth programs and prioritized business needs while investing about 30 percent of free cash flows in M&A opportunities. Seventy percent has been returned to shareholders in the form of dividends or share repurchases. Historically, about half of the company’s growth has come from mergers and acquisitions, and the remainder from internal development, which management anticipates to continue in the future. With a strong balance sheet, J&J possesses the financial strength and flexibility to execute on all of its capital allocation priorities simultaneously.

As an enterprise, J&J continued to concentrate on delivering on management’s financial and quality commitments during 2015. Consistent with leadership’s long-term strategy, J&J outperformed the 2015 adjusted operational earnings per share growth goal and met operational sales and free cash flow goals while executing against enterprise priorities for long-term value creation.

Good momentum continued throughout first-half 2016 as J&J produced solid financial results supported by strong underlying growth across the enterprise, according to company leaders. Based on the productive results in the first six months of 2016, management increased J&J’s sales guidance for full-year 2016 to $71.5 billion to $72.2 billion. Also, adjusted earnings guidance for full-year 2016 increased to $6.63-$6.73 per share.

The Pharmaceuticals business continued to generate a strong financial performance while bolstering what managers say is an industry-leading innovation pipeline. The Pharmaceuticals segment’s strategy is concentrated on five therapeutic categories – Immunology, Infectious Diseases & Vaccines, Neuroscience, Cardiovascular & Metabolism and Oncology – of high unmet medical need, a robust innovation engine, and proven commercial capabilities. J&J is in the midst of submitting for regulatory approval between 2015 and 2019 10 new product candidates each with annual billion-dollar sales potential in addition to 40 line extensions of existing and new medicines. The first of the 10 anticipated blockbuster breakthrough products reached the marketplace in 2015 four months ahead of schedule, the multiple myeloma drug Darzalex.

J&J has the world’s most comprehensive Medical Devices business, with 11 $1 billion-plus platforms. In its hospital medical device businesses, J&J holds worldwide leadership positions in Surgery and Orthopaedics, as well as key regional leadership positions in China and other emerging markets. With plans to file more than 20 major new products through 2018, expanding its worldwide presence and implementing novel commercial models, management anticipates delivering above-market growth by 2017. The business is additionally continuing to accelerate its pace of innovation, and estimates the current pipeline of products – expected to be submitted for regulatory approval by 2018 – has greater than $6 billion in sales potential.

J&J’s consumer medical device businesses have leading positions and are poised for growth, leaders say. Johnson & Johnson Vision Care, the worldwide market leader in contact lenses, expects to increase market share and exceed the industry pace of innovation by delivering two new products each year through 2020. The Johnson & Johnson Diabetes Care Companies, market leading in blood glucose monitoring, are increasing their competitiveness and anticipate improved market penetration worldwide to reach more patients. Together, these businesses have a robust innovation agenda with a pipeline of products expected to be submitted for regulatory approval by 2018, with sales potential exceeding $2 billion.

For the Medical Devices segment, J&J’s acquisition of Coherex Medical in the field of atrial fibrillation and the surgical robotics collaboration with Verily (formerly Google Lifesciences) during 2015 are examples of the type of strategic investments management will concentrate on in the future. As part of a restructuring announced during January 2016, the Medical Devices business is undertaking actions to further bolster the go-to-market model, accelerate the pace of innovation, prioritize key platforms and geographies, and streamline operations while maintaining high quality standards.

The restructuring efforts are expected to result in annualized pre-tax cost savings of $800 million to $1.0 billion, the majority of which is expected to be realized by year-end 2018, including $200 million in 2016. The savings will provide J&J with increased flexibility and resources to fund investment in new growth opportunities and innovative solutions for customers and patients. Management expects to record pre-tax restructuring charges of $2.0 billion to $2.4 billion, which will be treated as special items.

The restructuring actions announced in January 2016 will result in position eliminations of 4 to 6 percent of the Medical Devices segment’s worldwide workforce during the next two years.

Management’s priority for J&J’s Consumer segment in 2016 was to expand market leadership in key consumer segments in OTC, oral care, baby products and beauty. The Johnson & Johnson Consumer business competes in categories that total $350 billion worldwide, and those categories are increasing at a weighted average of more than 4 percent. The business has three $1 billion brands as of May 2016, and anticipates expanding that amount to five blockbuster brands by 2020.

J&J’s Consumer business is well positioned to grow sales above the market while continuing to expand margins to achieve benchmark levels of profitability, according to leadership. With a concentration on science-based, professionally endorsed products, the Consumer segment expects to accelerate growth with a differentiated innovation pipeline, including more than 100 new products during 2016.

 

2016 Performance & Outlook

J&J global sales during the first fiscal six months of 2016 totaled $35.96 billion, representing an increase of 2.3% – including operational growth of 4.6% – as compared to the 2015 first half. Currency fluctuations had a negative impact of 2.3% for first-half 2016. The impact of acquisitions, divestitures and competitive products to J&J’s Hepatitis C products, Olysio/Sovriad (simeprevir) and Incivo (telaprevir) on the global operational sales growth was negative 2.8%. Venezuela operations negatively impacted global operational sales growth by 0.5%.
Sales by U.S. companies reached $18.89 billion, up 7.3% year-over-year. Sales by international companies amounted to $17.07 billion, down 2.8% – including operational growth of 1.8% – offset by a negative currency impact of 4.6%.

J&J’s European companies produced a first-half 2016 sales decrease of 3.1%, which included an operational downswing of 0.6% and a negative currency impact of 2.5%. Sales by companies in the Western Hemisphere – excluding the United States – fell 8.5%, including operational growth of 7.1% that was offset by a negative currency impact of 15.6%. Sales by companies in the Asia-Pacific, Africa region produced 0.5% growth, which included operational growth of 2.5% and a negative currency impact of 2.0%.

For the first six fiscal months of 2016, Pharmaceutical segment sales rose 7.4% to $16.83 billion, with 9.1% operational growth and a negative currency impact of 1.7%. U.S. Pharmaceutical sales improved 13.1% while international Pharmaceutical sales fell 0.1%, including operational growth of 3.8% offset by a negative currency impact of 3.9%. Acquisitions, divestitures and competitive products to the Hepatitis C products, Olysio/Sovriad and Incivo had a negative impact of 3.4% on the operational growth of the Pharmaceutical segment. The Pharmaceutical segment was impacted 0.6% by a positive adjustment to previous reserve estimates versus first-half 2015.

Medical Devices segment sales were reported at $12.52 billion, falling 0.8% compared to the 2015 first half, with operational growth of 1.2% and a negative currency impact of 2.0%. U.S. Medical Devices sales grew 1.6% and international Medical Devices sales were down 2.9%, including an operational increase of 0.8% and a negative currency impact of 3.7%. Acquisitions and divestitures negatively affected the operational sales growth of the Medical Devices category by 2.2%.

Consumer segment sales in first-half 2016 dropped down to $6.61 billion, a 3.8% decline from the one-year-earlier period, including operational growth of 0.6% offset by a negative currency impact of 4.4%. U.S. Consumer segment sales went up 1.0% year-over-year. International Consumer segment sales declined 6.9%, including operational growth of 0.4% offset by a negative currency impact of 7.3%. The impact of acquisitions and divestitures on the Consumer segment operational sales growth represented a 2.3% decrease.

 

Pharma Product Approvals/Launches & Pipeline Updates In 2016

Research and development expenses amounted to $9.05 billion during 2015 compared to the prior-year total of $8.49 billion. R&D spending increased from $4.03 billion in first-half 2015 to $4.28 billion for the first six months of 2016. The growth was mainly due to increased investment spending in the Pharmaceutical segment to advance the robust product pipeline.

One of J&J’s best-selling pharma products was approved by the U.S. Food and Drug Administration for a new indication on Sept. 23, 2016. Marketed by Janssen Biotech, Stelara (ustekinumab) became the first biologic that targets interleukin-12 and interleukin-23 cytokines for treating Crohn’s disease. The cytokines play a key role in inflammatory and immune responses.

Stelara is now indicated for the treatment of moderately to severely active Crohn’s disease in adults (18 years or older) who have failed or were intolerant to treatment with immunomodulators or corticosteroids but never failed treatment with a tumor necrosis factor (TNF) blocker, or who failed or were intolerant to treatment with one or more TNF blockers. Stelara was initially FDA-approved for moderate or severe plaque psoriasis in September 2009 and for active psoriatic arthritis during September 2013.

stelara

September is a frequent month of regulatory action for Stelara, as during that month in 2016 the biologic therapy received a CHMP positive opinion recommending its approval for treating moderately to severely active Crohn’s disease in the European Union. Janssen-Cilag International announced the Committee for Medicinal Products for Human Use’s adoption of a positive opinion recommending marketing authorization.

Phase 3 trial findings reported in May demonstrated that Stelara maintained clinical remission after one year of treatment in patients with moderate to severe Crohn’s disease. Fifty percent of patients treated with the biologic achieved clinical remission according to pivotal Phase 3 IM-UNITI trial data.

Janssen Research & Development filed a Supplemental New Drug Application for Imbruvica (ibrutinib) with FDA seeking marketing approval for a fifth unique indication: Marginal Zone Lymphoma (MZL). As of September 2016, there were no therapies approved for treating patients with MZL, a rare and incurable disease.

imbruvica_120_caps_box_bottle

Initially approved by FDA during 2013, Imbruvica is jointly developed and commercialized by Janssen and Pharmacyclics, an AbbVie company. Imbruvica is already approved in the United States to treat patients with chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL) including patients with 17p deletion, patients with mantle cell lymphoma (MCL) who have received at least one prior therapy and patients with Waldenström’s macroglobulinemia (WM). Accelerated approval was granted by FDA for MCL based on overall response rate.

Imbruvica was one of the first therapies to gain FDA marketing clearance after having received Breakthrough Therapy Designation. The product’s label was expanded by FDA in May to include overall survival data from the Phase 3 RESONATE-2 (PCYC-1115) study in treatment-naïve CLL/SLL patients 65 years or older. The updated label additionally contains clinical data from the Phase 3 HELIOS (CLL3001) study investigating the use of Imbruvica in combination with bendamustine and rituximab (BR) compared to placebo plus BR in patients with relapsed or refractory CLL/SLL.

U.S. regulatory approval for Imbruvica capsules was announced in March for treatment-naïve patients with CLL. This approval broadened the indication beyond the initial CLL approval in February 2014 for treating patients with CLL who have received at least one prior therapy, and during July 2014 for CLL patients with del 17p,1 a genetic mutation typically associated with poor treatment outcomes.

Imbruvica works by blocking a specific protein called Bruton’s tyrosine kinase (BTK). The BTK protein sends important signals that inform B cells to mature and produce antibodies and is needed by specific cancer cells to multiply and spread. The kinase inhibitor targets and blocks BTK, inhibiting cancer cell survival and spread.

The European Commission during May gave a nod of approval to Imbruvica as a treatment of adult patients with previously untreated CLL. This approval broadens the indication beyond the initial CLL marketing clearance by the EC during October 2014. Ibrutinib is now approved for all patients in the EU with CLL, expanding the amount of individuals who may benefit from this treatment.

Janssen Biotech filed a Biologics License Application (BLA) with U.S. drug regulators in September for sirukumab as a treatment of adult patients with moderately to severely active rheumatoid arthritis (RA). The human monoclonal IgG1 kappa antibody targets the cytokine IL-6, a naturally occurring protein believed to play a role in autoimmune conditions such as RA. As of this magazine’s press time, sirukumab had not been approved as a treatment for RA or any other indication anywhere worldwide.

Janssen Research & Development released results from a pivotal Phase 3 study investigating subcutaneous sirukumab (product code CNTO 136) for treating moderately to severely active rheumatoid arthritis (RA). Data from the study of 1,670 patients showed patients receiving sirukumab demonstrated significant inhibition of radiographic progression, or joint destruction, from baseline to week 52 and improvement in signs and symptoms of RA at week 16, the study’s co-primary endpoints, versus patients receiving placebo.

During December 2011, Janssen and GSK entered into a licensing and joint-development deal for sirukumab. GlaxoSmithKline holds exclusive rights to commercialize sirukumab in North, Central and South America. Janssen is responsible for commercialization rights in the remainder of the world, including such territories as Europe, Middle East and Africa (EMEA) and Asia Pacific with global profit shared equally between the two companies. Previously. Janssen had been developing sirukumab for RA.

The second half of September 2016 was a busy one for the Janssen family of companies in addition to the news about Stelara, Imbruvica and sirukumab. Another highlight was the FDA marketing approval of Janssen Pharmaceuticals’ Invokamet XR for treating adults with type 2 diabetes.

The once-daily, fixed-dose combo therapy consists of canagliflozin and metformin hydrochloride extended-release. Invokamet XR is indicated for first-line use as an adjunct to diet and exercise to improve blood glucose control in adults with type 2 diabetes when treatment with the two medications is appropriate. The new medicine joins together Invokana (canagliflozin) – the most prescribed sodium glucose co-transporter 2 (SGLT2) inhibitor with more than 9 million U.S. prescriptions since launch – and an extended-release formulation of metformin, which is commonly prescribed as an initial therapy for treating type 2 diabetes.

Invokamet represents the first combination of an SGLT2 inhibitor and an immediate-release version of metformin available in the United States. The product gained initial U.S. regulatory clearance during August 2014 as an adjunct to diet and exercise to improve glycemic control in adults with type 2 diabetes not adequately controlled with metformin or canagliflozin, or who are already being treated with each medication separately. FDA during May 2016 expanded the Invokamet indication to include adults with type 2 diabetes who are not already being treated with canagliflozin or metformin and may benefit from dual therapy.

Janssen-Cilag International announced the submission of a Marketing Authorization Application to the European Medicines Agency in September for approval of a new once-daily darunavir-based single-tablet regimen (STR). If approved, this tablet would represent the first protease inhibitor (PI)-based STR option (D/C/F/TAF FDC), indicated as a complete regimen for treating human immunodeficiency virus type 1 (HIV-1) infection in adults and adolescents (aged 12 years and older with body weight of at least 40 kg). This new treatment would join together the protease inhibitor darunavir (DRV, D, 800 mg) with the pharmacokinetic enhancer cobicistat (COBI, C, 150 mg) and the nucleoside reverse transcriptase inhibitors emtricitabine (FTC, F, 200 mg) and tenofovir alafenamide (TAF 10 mg) in one tablet.

Treatment regimens containing DRV/COBI (Rezolsta, marketed by Janssen-Cilag) and F/TAF (Gilead Sciences International) are approved for HIV maintenance treatment. The darunavir STR option is a significant evolution of this treatment approach, combining both drug treatments in one convenient tablet.

Prezista, co-administered with low-dose ritonavir, is indicated in combination with other antiretroviral medicinal products for treating HIV-1 infection in adult and pediatric patients from the age of 3 years and at least 15 kg body weight. Prezista, co-administered with cobicistat, is available in combination with other antiretroviral medicines for the treatment of HIV-1 infection in adult. The antiviral medicine Rezolsta (darunavir and cobicistat) is used in combination with other drugs to treat adults with HIV-1, a virus that causes acquired immune deficiency syndrome (AIDS).

Janssen and Gilead struck a deal in December 2014 for the development and commercialization of a once-daily STR combination of darunavir and Gilead’s cobicistat, emtricitabine and tenofovir alafenamide. Janssen and its affiliates are responsible for the manufacturing, registration, distribution and commercialization of this STR around the globe. Gilead maintains sole rights for the manufacturing, development and commercialization of cobicistat, emtricitabine and tenofovir alafenamide as stand-alone products, and for use in combination with other agents.

Marketing applications to expand the usage of Darzalex (daratumumab) were submitted to the U.S. and EU health regulatory bodies during August. The applications seek to broaden the existing indication for the immunotherapy to include treatment of adult patients with relapsed multiple myeloma who have received at least one prior therapy. The expanded indication is based on daratumumab in combination with the immunomodulatory agent lenalidomide and dexamethasone, or bortezomib (a proteasome inhibitor/PI) and dexamethasone.

darzalex-approval-mnr_400mg-image-and-package-042964-151105

Phase 3 data supporting the U.S. and EU filings suggests the potential clinical benefit of daratumumab as a backbone therapy in combination with either a PI or an immunomodulatory agent for patients with relapsed multiple myeloma. Phase 3 data from the MMY3003 (POLLUX) study revealed in June demonstrated daratumumab in combination with the standard of care treatment regimen lenalidomide and dexamethasone achieved a significant 63 percent reduction in the risk of disease progression or death compared to lenalidomide and dexamethasone alone in patients with multiple myeloma who had received at least one prior line of therapy. In addition, data from the Phase 3 MMY3004 (CASTOR) study reported in June demonstrated daratumumab in combination with standard of care therapy bortezomib and dexamethasone showed a 61 percent reduction in the risk of disease progression or death compared to bortezomib and dexamethasone alone in patients with multiple myeloma who received a median of two prior lines of therapy.

Darzalex received FDA accelerated approval during November 2015 for treating patients with multiple myeloma who have received at least three prior lines of therapy, including a PI and an immunomodulatory agent, or who are double-refractory to a PI and an immunomodulatory agent. Breakthrough Therapy Designation was granted by U.S. regulators for this indication in May 2013.

Daratumumab received conditional approval from the European Commission in May 2016 for monotherapy of adult patients with relapsed and refractory multiple myeloma, whose prior therapy included a PI and an immunomodulatory agent, and who have shown disease progression on the last therapy.

Darzalex injection for intravenous use is the first CD38-directed monoclonal antibody (mAb) approved anywhere worldwide. The surface protein CD38 is highly expressed across multiple myeloma cells, regardless of disease stage. Daratumumab is thought to induce tumor cell death via multiple immune-mediated mechanisms of action – including complement-dependent cytotoxicity (CDC), antibody-dependent cellular cytotoxicity (ADCC) and antibody-dependent cellular phagocytosis (ADCP) – as well as through apoptosis, in which a series of molecular steps in a cell lead to its death. Daratumumab additionally demonstrates other effects on the immune system, including lysis of immunosuppressive CD38+ regulatory T cells (Tregs) and myeloid derived suppressor cells (MDSCs).

Darzalex is being studied in a comprehensive clinical development program that includes five Phase 3 trials across a range of treatment settings in multiple myeloma, including in frontline and relapsed settings. Other studies are under way or planned to assess the drug’s potential for a solid tumor indication and in other malignant and pre-malignant diseases in which CD38 is expressed, such as smoldering myeloma and non-Hodgkin’s lymphoma. Darzalex was the first mAb to gain regulatory clearance to treat relapsed or refractory multiple myeloma.

Janssen Biotech and Genmab entered into a global deal during August 2012. Janssen received an exclusive license to develop, manufacture and commercialize Darzalex. The product is marketed in the United States by Janssen Biotech.

FDA during July gave the green light to Prezista for expanded use in pregnant women with HIV. Data demonstrates that Prezista is a safe and effective treatment option in pregnant women, with no reports of mother-to-child HIV transmission among women who continued therapy through delivery.

As part of J&J’s dedication to fight Ebola, Janssen Pharmaceutica’s Idylla Ebola Virus Triage Test was granted Emergency Use Authorization by FDA as announced on June 1. The diagnostic test detects the presence of the Ebola Zaire virus in patients with signs and symptoms of Ebola virus disease. Idylla EBOV Test was jointly developed by Janssen Diagnostics – a division of Janssen Pharmaceutica – Biocartis, and the Belgium Institute of Tropical Medicine.

The real-time reverse transcription polymerase chain reaction (rRT-PCR) test is intended for the qualitative detection of RNA from the Ebola Zaire virus in EDTA venous whole blood from patients with signs and symptoms of Ebola virus infection in conjunction with epidemiological risk factors. The blood sample is placed into a sealed cartridge and necessitates no additional manipulation of potentially infected blood. After processing, the outside of the cartridge can be decontaminated before disposal. Results are processed within 100 minutes.

Trevicta (paliperidone palmitate a 3-monthly injection) received clearance from the European Commission during May for maintenance treatment of schizophrenia in adults. The product provides the longest dosing interval on the market for an antipsychotic medication in the European Union, enabling patients to maintain an optimal level of treatment in their blood with fewer administrations compared to currently available antipsychotic treatments. Trevicta is indicated for the maintenance treatment of schizophrenia in adult patients who are clinically stable on Xeplion, a once-monthly paliperidone palmitate medicine that was approved during 2011 for the maintenance treatment of schizophrenia in the European Union.

Simponi (golimumab) was the recipient of a CHMP positive opinion for the treatment of polyarticular juvenile idiopathic arthritis in May. If approved, Simponi would become available for treating patients with active pJIA, the most common form of arthritis in children under the age of 17 in which the predominant symptoms are persistent joint pain, swelling and stiffness.

A human monoclonal antibody, Simponi targets and neutralizes excess tumor necrosis factor (TNF)-alpha, a protein that when overproduced in the body due to chronic inflammatory diseases can result in inflammation and damage to bones, cartilage and tissue. Simponi is available in more than 85 countries for rheumatologic indications such as rheumatoid arthritis, ankylosing spondylitis and psoriatic arthritis. The medicine received European Commission clearance during October 2009 for the treatment of moderate-to-severe, active RA in combination with methotrexate; for treating active and progressive psoriatic arthritis alone or in combination with methotrexate; and for the treatment of severe, active ankylosing spondylitis. During September 2013, Simponi gained EC approval for treating moderately to severely active ulcerative colitis in adults. In June 2015, the product received approval from the European Commission for the treatment of adults with severe, active non radiographic axial spondyloarthritis with objective signs of inflammation. Simponi is available either via the SmartJect autoinjector/prefilled pen or a prefilled syringe as a subcutaneously administered injection.

Janssen Biotech discovered and developed Simponi, and markets the biological therapeutic in the United States.

Janssen Research & Development halted the Phase 3 development program for fulranumab in osteoarthritis pain during March. According to the company, this decision was based on strategic portfolio prioritization and was not on any emerging safety concerns from the Phase 3 trials with fulranumab. In addition, Janssen Pharmaceuticals terminated its licensing deal with Amgen for fulranumab and returned all program rights back to the Thousand Oaks, Calif-based biotech company.

Fulranumab is part of an investigational class of non-opioid biological medicines called anti-nerve growth factor compounds. During 2008, Amgen licensed fulranumab to Ortho-McNeil-Janssen Pharmaceuticals, now known as Janssen Pharmaceuticals. The Neuroscience therapeutic area of Janssen Research & Development continues to pursue discovery and development programs in Alzheimer’s disease and serious mental conditions.

Data were revealed in March by Janssen-Cilag from a post-hoc analysis of the Phase 3 COU-AA-302 study for Zytiga plus prednisone. The results demonstrated that Zytiga (abiraterone acetate) with prednisone provided an 11.8 months overall survival benefit versus an active control of placebo plus prednisone in men with early and less aggressive chemotherapy-naïve metastatic castration-resistant prostate cancer (mCRPC).

In other March highlights, results of data analysis from real-world clinical practice demonstrated that – in adults with type 2 diabetes – use of the once-daily oral medication Invokana is associated with significantly greater improvements in blood glucose control compared to dipeptidyl peptidase-4 inhibitors. DPP-4 inhibitors make up a common class of medicines for type 2 diabetes that includes Januvia (sitagliptin). The new real-world findings were the first to compare the effectiveness of a SGLT2 inhibitor with DPP-4 inhibitors.

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Deals & Collaborations

J&J strengthened the company’s worldwide leadership in eye health during September via the acquisition of Abbott Medical Optics. A wholly owned subsidiary of Abbott Laboratories, AMO was purchased for $4.325 billion in cash. AMO reported 2015 sales of $1.1 billion. The acquisition includes ophthalmic products in three business sectors: cataract surgery, laser refractive surgery and consumer eye health. The deal was anticipated to close during first-quarter 2017.

“Eye health is one of the largest, fastest growing and most underserved segments in health care today,” stated Company Group Chairman Ashley McEvoy, who is responsible for J&J’s Vision Care Companies. “With the acquisition of Abbott Medical Optics’ strong and differentiated surgical ophthalmic portfolio, coupled with our world-leading Acuvue contact lens business, we will become a more broad-based leader in vision care. Importantly, with this acquisition we will enter cataract surgery – one of the most commonly performed surgeries and the number one cause of preventable blindness.”

AMO is a worldwide leader in ophthalmic surgery and is known for world-class intraocular lenses used in cataract surgery. In addition to the cataract business, the AMO portfolio consists of advanced laser vision (LASIK) technologies designed to enhance surgeon productivity and correct near sightedness, far sightedness and astigmatism. The acquisition additionally includes AMO’s consumer eye health products – OTC drops for dry eye, as well as multipurpose solutions and hydrogen peroxide cleaning systems for contact lens patients.

Janssen Biotech and Bristol-Myers Squibb agreed on a clinical study collaboration in July to investigate the combination of two immuno-oncology compounds in patients with non-small cell lung cancer (NSCLC). The Phase 2 study will assess the tolerability and clinical activity of the combination of Janssen’s investigational immunotherapy JNJ-64041757 and Bristol-Myers Squibb’s PD-1 immune checkpoint inhibitor Opdivo (nivolumab) in NSCLC patients.

The antigen-presentation therapeutic JNJ-64041757 is based on Live Attenuated Double-Deleted (LADD) Listeria monocytogenes strains engineered to induce an immune response against NSCLC tumors. Janssen licensed that drug candidate (previously referred to as ADU-214) and another compound, JNJ-64041809 (previously referred to as ADU-741), from Aduro Biotech during 2014. Both compounds were in Phase 1 development as of July: JNJ-64041757 in lung cancer and JNJ-64041809 in prostate cancer. Opdivo is on the market for treating patients with NSCLC with progression on or after platinum-based chemotherapy.

In mid-July, J&J announced the completed acquisition of Vogue International by Johnson & Johnson Consumer for $3.3 billion in cash. Privately held Vogue International has concentrated on the marketing, development and distribution of salon-influenced and nature inspired hair care and other personal care products.

Johnson & Johnson Consumer during April definitively agreed to acquire NeoStrata, a worldwide leader in dermocosmetics. The acquisition includes NeoStrata’s affiliates and parent company TriStrata, a privately held company. Princeton, N.J.-based NeoStrata has a history of innovation that includes breakthrough research in Alpha hydroxy acids, which have become a standard among anti-aging technologies in the beauty category. The company develops and markets an array of clinically proven, dermatologist-developed, skin-care products that meet the needs of all skin types.

Janssen Biotech announced on April 6 a global collaboration and license pact for exclusive rights to Tesaro’s investigational compound niraparib in prostate cancer. Niraparib is an orally administered poly polymerase (PARP) inhibitor undergoing late-stage development for patients with metastatic breast cancer and ovarian cancer. Janssen acquired worldwide rights and is responsible for all development and commercialization activities for niraparib for use in prostate cancer, except in Japan. Tesaro holds worldwide development, manufacturing and commercial rights for all other indications.

Separate to the exclusive license and collaboration transaction, Johnson & Johnson Innovation made an equity investment in Tesaro.

PARP proteins have a key survival role in the repair of DNA in cancer cells. By inhibiting PARP, certain defective cancer cells are unable to repair themselves, resulting in cell death. Some men with prostate cancer have these defective cancer cells and may benefit from use of a PARP inhibitor, either alone, or in combination with other medicines.

Janssen Research & Development in March came to terms on a clinical trial collaboration with Roche Group member Genentech. The companies are initiating two studies to determine the safety and tolerability of daratumumab in combination with atezolizumab, an investigational mAb designed to bind with a protein called programmed cell death-ligand 1 (PD-L1). These studies are evaluating the potential of the combination therapy in multiple myeloma and in solid tumor. Atezolizumab has been undergoing development by Roche. Janssen licensed daratumumab from Genmab and is in charge of the drug’s development and marketing.

J&J medical device company Ethicon announced in March a definitive deal to acquire NeuWave Medical. A privately held medical device company, NeuWave manufactures and markets minimally invasive soft tissue microwave ablation systems. NeuWave products have been used by physicians in more than half of the leading U.S. cancer centers. This transaction is consistent with the Johnson & Johnson Medical Devices’ strategy of advancing innovation and investing in fields of unmet medical needs, including surgical oncology.

At the beginning of 2016, Janssen Sciences Ireland formalized its collaboration with ViiV Healthcare. The companies agreed on phase III development and commercialization of a two-drug regimen of two long-acting, all-injectable formulations of Janssen’s non-nucleoside reverse transcriptase inhibitor rilpivirine and ViiV Healthcare’s cabotegravir. Janssen and ViiV have been working together on this regimen, via various clinical study deals, for several years. Under the new arrangement, the phase III development – to assess the efficacy, safety and tolerability of the regimen – is being led by ViiV with support from Janssen. Both companies are to manufacture and supply their individual drug formulations following successful phase III completion and regulatory outcomes.