Johnson & Johnson's profit climbed Results improved in the last quarter and full year. Being broadly based helped, the chairman said.

Posted: January 22, 2003

Johnson & Johnson said yesterday that net earnings climbed 17 percent last year, helped by demand for products ranging from its Remicade arthritis medication to a treatment for anemia.

Fourth-quarter profit surged 30 percent, boosted by robust sales of medical devices for the heart and prescription drugs, including Remicade, which is manufactured by Centocor Inc., a J&J subsidiary in Malvern.

"It's as impressive as it gets," Morningstar Inc. analyst Todd Lebor said. "What's most impressive is the jump in operating margin. Over the last decade, J&J has been creeping up its profitably before interest and taxes from 12 to 13 percent in the early 1990s to 26.2 percent last year.

"The increase in profitability has mostly to do with the growth of three or four pharmaceuticals, including Remicade and Procrit," the prescription anemia drug, Lebor said.

Johnson & Johnson employs 6,500 in the Philadelphia region, including 2,200 at McNeil Consumer & Specialty Pharmaceuticals and two other Johnson & Johnson companies in Fort Washington, and 1,700 at Centocor.

The world's fifth-largest drugmaker announced last week that it was also acquiring 3-Dimensional Pharmaceutical Inc., of Yardley.

J&J said sales of Remicade to treat the bowel disorder Crohn's disease and rheumatoid arthritis soared 80 percent in the quarter to $379 million.

Sales of the Duragesic skin patch to treat pain rose 42 percent to $320 million, while those of the antipsychotic medicine Risperdal jumped 23 percent to $568 million. And worldwide sales of its anemia drug Procrit jumped 36 percent to $1.1 billion.

"Being broadly based has served us very well," particularly in medical devices, pharmaceuticals, and J&J's consumer business, William Weldon, the company's chairman and chief executive officer, said.

J&J's capacity to make Remicade doubled last year when the FDA authorized a Centocor plant in Malvern to make it.

The pending acquisition of 3-Dimensional Pharamceuticals "will add expertise in discovery and development of new drugs. Investments in technology and science are the key to our future," Weldon said.

J&J, of New Brunswick, N.J., hopes to win approval from U.S. regulators this year for Cypher, a stent coated with a drug to keep arteries from reclogging. The product is already sold in Europe and other countries, and J&J claims a 30 percent share in the stent market.

Sales of the company's consumer products - including Tylenol, Motrin, Splenda, Viactiv, Lactaid and Band-Aids - rose 6.4 percent to $1.65 billion in the fourth quarter.

Weldon called the Band-Aid liquid bandage "a revolutionary product and yet another example of the diverse capabilities within Johnson & Johnson.

"Some see the industry as ripe for consolidation," he said. "We view this as a time to further broaden our reach in health care."

Contact staff writer Linda Loyd at 215-854-2831 or lloyd@phillynews.com.

Company (Symbol) Exchange

Johnson & Johnson (JNJ) NYSE

4 qtr. '02 4 qtr. '01 Pct.

end 12/31 end 12/31 chg.

Revenue (millions) $9,403 $8,225 +14

Net income (millions) $1,438 $1,105 +30

Per share $0.48 $0.36 +33

12 mo '02 12 mo '01 Pct.

Revenue (millions) $36,298 $32,217 +13

Net income (millions) $6,651 $5,668 +17

Per share $2.18 $1.84 +18

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