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Products: Johnson & Johnson (JNJ)

Pharmaceutical(Pharmaceutical)
Medical Devices(Medical Devices)
Consumer Healthcare(Consumer Healthcare)

Pharmaceutical

What is being offered?

Pharmaceuticals division includes, Immunology, Neuroscience, Oncology, Anti-Infectives, Cardiovascular & Metabolism, and Pulmonary Hypertension.

Immunology: This division includes immuno-modulators drugs which alter the immune response by augmenting or reducing the ability of the immune system to produce antibodies. Some immuno-modulators are naturally present in the body and certain of these are available in pharmacologic preparations.

Oncology:This segment includes drugs for treatment of various types of cancer. Some of the key products are Velcade, Imbruvica, Darzalex and Zytiga. This is the fastest growing segment for Johnson & Johnson.

Anti-Infectives:Anti-infectives are substances that counteract infection and include anti-septics, disinfectants, anti-biotics, anti-fungal and virucidal agents. J&J has a small position in this segment with well known brands Prezista and Edurant.

Neuroscience:The Central Nervous System is part of the nervous system that integrates the information it receives and coordinates the activity of all parts of the body of bilaterian animals including human beings. It consists of the majority of nervous system and consists of the brain and spinal cord.

Of the entire central nervous system drugs market, antidepressants, anti-psychotics and anti-epileptics are the largest segments having a combined market share of more than 60%.

J&J has a strong presence within this segment with blockbuster drugs like Risperdal, Concerta and Invega.

With the Actelion acquisition in 2017, the company now has access to Pulmonary Hypertension drugs, such as, Opsumit, Tracleer, and Uptravi.

Who is buying?

Chain stores(Walgreens, CVS, Rite-Aid, Wal-Mart), clinics, long term care facilities, HMO, federal facilities, non-federal institutions and mail order pharmacies.

Competitors

Pfizer, Novartis, Glaxo SmithKline, Astra-Zeneca, Takeda, 3M Pharmaceuticals and Merck.

What buyers care about?

  1. Price of drugs
  2. Subsidies available in the form of reimbursements
  3. Availability of drugs
  4. Any possible side effects

J&J strengths

  1. Diversified product offerings
  2. Established brands in the health care sector
  3. Relentless focus on R&D
  4. Significant sales & marketing capabilities
  5. Vertical integration - control over R&D, manufacturing

J&J's Revenue From Neuroscience Drugs

This represents Johnson & Johnson's revenue from sales of neuroscience drugs including Risperdal, Concerta, Invega and other.

J&J's Revenue From Neuroscience Drugs has been declining over the last few years due to patent loss of several drugs. The figure stood at $6 billion in 2017.

Chart: J&J's Revenue From Neuroscience Drugs

J&J's Cardiovascular and Other Drugs Revenue

This figure represents J&J's revenue from cardiovascular, metabolism and other drugs.

After a period of decline, J&J's Cardiovascular & Other Drugs Revenue increased sharply in 2014 and 2015 primarily due to launch of diabetes 2 drug Invokana and accelerated ramp up of anti-coagulant Xarelto. The sales stood at $6.3 billion in 2017. We expect the revenues to increase in the near term, partly reflecting the benefits from Actelion acquisition. In the long run.

Chart: J&J's Cardiovascular and Other Drugs Revenue

Pulmonary Hypertension Drugs Revenue

This represents Johnson & Johnson's revenues from sales of pulmonary hypertension drugs. The segment primarily includes Opsumit, Tracleer, and Uptravi drugs, which were part of Actelion's portfolio.

The segment revenues stood at $1.3 billion in 2017, and we estimate the same to grow to $2.6 billion by the end of our forecast period. There is no historical data for this segment since these drugs were acquired by J&J in its Actelion buyout in 2017.

Chart: Pulmonary Hypertension Drugs Revenue

J&J's Immunology Revenue

This represents Johnson & Johnson's revenue from sales of immunology drugs including Remicade, Simponi, Stelara and others.

J&J's Immunology Revenue has increased consistently over the last few years amounting to $12.2 billion in 2017 due to continued uptake of Remicade, Simponi and Stelara.

Chart: J&J's Immunology Revenue

J&J's Oncology Drugs Revenue

This figure refers to revenues earned by J&J from oncology drugs, which are used for treating different types of cancer.

J&J's Oncology Drugs Revenue has increased rapidly over the last few years, amounting to $7.3 billion in 2017.

Chart: J&J's Oncology Drugs Revenue

Medical Devices

What is being offered?

The segment can be sub-divided into Orthopedic, Surgery, and Others, which includes, Cardiovascular, Vision Care, Diabetes Care and Other Clinical Diagnostics.

Orthopedic:DePuy is J&J’s largest segment within the Medical Devices & Diagnostics portfolio and consists of four companies:

1) DePuy Orthopedics which manufacturers hip, knee, shoulder replacements and trauma products

2) DePuy Spine, which is the second-largest spine company

3) DePuy Mitek, which manufacturers orthopedic sports medicine products including MIS and arthroscopic products, soft tissue repair devices and joint movement solutions

4) Codman & Shurtleff/Micrus Endovascular, its neurovascular/neurosurgery devices business which includes guidewires, brain pressure monitoring systems, balloon catheters, access devices, stents, detachable embolic coil systems and micro-catherers

Surgery:Ethicon Endo-Surgery (EES) includes endo-mechanical devices, access devices, energy-based devices, stapling systems, ligation devices and gastric banding systems.

Ethicon Endo-surgery devices are used in a wide range of specialty surgeries, such as colorectal, bariatric, ENT, gynecology and urology, orthopedics, thoracic, breast, plastic, as well as a variety of general surgeries. EES also includes J&J’s Advanced Sterilization Products (ASP) business.

Others:

Cardiovascular portfolio is focused on the treatment and management of circulatory diseases, particularly cardiovascular and endovascular. The company sells coronary stents, diagnostic catheters, carotid stents, embolic protection devices, peripheral stents among other devices.

Vision Care's sales are primarily derived from the well known ACUVUE brand contact lenses. Also, the company acquired Abbott Medical Optics in 2017, which has boosted the segment sales.

J&J's Diabetes Care segment consists mainly of home glucose testing devices, OneTouch line of glucose meters and strips and insulin pumps.

Who is buying?

Chain stores(Walgreens, CVS, Rite-Aid, Wal-Mart), clinics, long term care facilities, HMO, federal facilities, non-federal institutions and mail order pharmacies.

Competitors

Boston Scientific, Zimmer, Stryker, Biomet, and Smith & Nephew among others

What buyers care about?

  1. Cost of equipments/treatments
  2. Subsidies available in the form of reimbursements
  3. Availability of products
  4. Any possible side effects
  5. Physiotherapy requirements

J&J strengths

  1. Diversified product offerings
  2. Established brands in the health care sector
  3. Relentless focus on R&D
  4. Significant sales & marketing capabilities
  5. Vertical integration - control over R&D, manufacturing and distribution

Ortho-Clinical Diagnostics Revenue

This represents Johnson & Johnson's revenues from sales of ortho-clinical diagnostic products. The company manufactures and sells diagnostic systems and tests to labs, hospitals and blood centers for donor screening.

Ortho-Clinical Diagnostics Revenue increased steadily from $1.8 billion in 2008 to $2.16 billion in 2011, largely as a result of continued strength of newer products such as the VITROS brand Analyzers. However, the figure fell to $1.89 billion by 2013 due to lower sales in donor screening due to competitive pressure and the divestiture of the RhoGAM business. In 2015, the figure stood at $85 million due to partial accounting resulting from sell-off. Johnson & Johnson has sold off this division to Carlyle group.

Chart: Ortho-Clinical Diagnostics Revenue

J&J's Surgical Devices Revenue

This represents Johnson & Johnson's revenues generated from sales of surgical devices.

J&J's Surgical Devices Revenue have remained in the range of $9.2-10 billion since past 7 years. The figure stood at $9.6 billion in 2017.

Chart: J&J's Surgical Devices Revenue

J&J's Orthopedic Devices revenue

This refers to J&J's share in the global orthopedic devices market. Revenues are derived from joint reconstruction devices and procedures, spinal devices, sports medicine devices and certain neurovascular/neurosurgery devices which include guide-wires, brain pressure monitoring systems and stents.

J&J's Orthopedic Devices revenues have increased from $5.6 billion in 2019 to $9.3 billion in 2017.

Chart: J&J's Orthopedic Devices revenue

J&J's Vision Care Revenue

This represents Johnson & Johnson's revenues from the sale of vision care products, which include ACUVUE contact lenses.

J&J's Vision Care Revenue has historically been in the range of $2.6-3 billion. However, the figure jumped ito $4.1 billion in 2017, due to AMO acquisition.

Chart: J&J's Vision Care Revenue

J&J's Cardiovascular Revenue

This represents Johnson & Johnson's sales from its Cordis portfolio of stents and catheters.

J&J's Cardiovascular Revenue have fluctuated in recent years due to combination of increased competition, exiting drug-eluting stent market, success of biosense webster and adverse currency effect. In 2015, the figure stood at around $2 billion. In 2016, there was a sharp decline due to divestiture of Cordis and the revenue fell to $1.85 billion. However, revenue picked up in 2017 to $2 billion. The vascular market is highly competitive with pure-play medical devices companies holding market leading position. Also, of late the company is primarily focused on surgical devices.

Chart: J&J's Cardiovascular Revenue

Consumer Healthcare

What is being offered?

This division includes:

1) J&J's OTC and Nutritionals segment markets products used to treat common cold, allergies, coughs, pain and heartburn. Nutritional products include sweeteners, milk and dietary supplements among many others. Some of the the brands include Zyrtec, Tylenol, Benadryl and Nicorette.

2)Women’s Health business which includes sales of Stayfree and CareFree sanitary pads, O.B tampons, Monistat for treating yeast infections, and the K-Y line of products.

3) Oral Care business which includes the market leading Listerine mouthwash brand, the Rembrandt brand of oral care products which includes toothpastes, whitening strips, and mouth rinses as well as the line of Reach toothbrushes and floss.

4) Wound Care and Other business which includes sales from the iconic Band-Aid brand, Neosporin, Bengay, Purell and other products used to treat cuts, rashes and itching.

5) Skin care products such as creams and lotions to moisturize the face and body, sunscreens to protect the skin from harmful UV (Ultraviolet) radiation and damage, skin lighteners, and treatment products to repair or hide skin imperfections (acne, wrinkles, dark circles under eyes, etc.), tanning oils to brown the skin. Some key brands include Neutrogena, Aveeno, Clean & Clear, Rogaine, and Lubriderm.

6) Baby care products under iconic brand Johnson’s.

Who is buying?

Retail stores such as Wal-Mart, Costco & Target, pharmacies such as Walgreens, CVS & Rite-Aid.

Competitors

Pfizer, Merck, Abbott Labs, Novartis, Glaxo SmithKline, Astra-Zeneca, Takeda, Teva, Sanofi-Aventis

What buyers care about?

  1. Prices
  2. Brand image
  3. Any possible side effects

J&J strengths

  1. Diversified product offerings
  2. Established brands in the health care sector
  3. Relentless focus on R&D
  4. Significant sales & marketing capabilities
  5. Vertical integration - control over R&D, manufacturing and distribution

Other Consumer Healthcare Revenue

This figure represents revenues earned by J&J from women's health products, oral care products and wound care and other products.

Other Consumer Healthcare Revenue declined in the last couple of years, amounting to $3.3 billion in 2017. Much of this can be attributed to adverse currency movement and higher competition in the global market.

Chart: Other Consumer Healthcare Revenue

Baby Care Revenue

This figure represents J&J's revenues from baby care products such as baby food, baby skin products, baby hair products, diapers and toiletries.

Baby Care Revenue has declined over the last few years amounting to $1.9 billion in 2017. This decline can be attributed to supply constraints, increasing competition and adverse currency movements.

Chart: Baby Care Revenue

OTC Revenue

This figure refers to J&J's revenue from sales of OTC (over-the-counter) medicines which can be sold directly to customers without prescription from healthcare professionals, and nutritional products such as sweeteners, milk and dietary supplements.

OTC Revenues has fluctuated over the last few years amounting to $4.1 billion in 2017. The fluctuation can be attributed to supply chain issues (which were addressed later), increased competition and adverse currency effects.

Chart: OTC Revenue

Beauty Revenue

This figure refers to revenues earned by J&J from skin care products such as creams and lotions which are used to moisturize the face and body, sunscreens to protect the skin from harmful UV radiation and damage, skin lighteners, and treatment products to repair or hide skin imperfections.

Beauty Revenues has fluctuated over the last few years amounting to $3.53 billion in 2015. In 2016, however, the figure jumped to $3.9 billion partly driven by acquisitions including Vogue and NeoStrata, and strong demand for Neutrogena. In 2017, the figure stood at $4.2 billion.

Chart: Beauty Revenue