Johnson & Johnson’s device revenues dropped by more than 11 percent in the most recent quarter, the New Brunswick, N.J.-based health care giant reported Tuesday.
Financial records show J&J’s worldwide device sales for the first quarter of 2015 totaled $6.3 billion, down 11.4 percent from the same quarter in 2014. Domestic sales were down by 6.1 percent, while international sales decreased 15.6 percent.
Much of the drop was caused by acquisitions, sales and negative currency trends, J&J says. If those are removed from consideration, domestic sales increased by 1.1 percent and international sales increased by 1.5 percent. Sales of electrophysiology, orthopedic, endocutter and insulin delivery products were particularly strong, while vision care sales dropped because of changing buying patterns and market competition.
J&J remains optimistic about the future of its device division, CFO Dominic Caruso says. The company recently exited the women’s health business and has about 30 new products to launch through the end of 2016. Caruso also foresees a stronger future for its BioSense Webster cardiological products.
“We are pleased with being in the cardiovascular device space where innovation is rewarded and where there is significant unmet need that we can actually address,” he says. By contrast, the company’s recently sold Cordis division was more of a “commodity business” that will be better-served by new owners Cardinal Health. The $1.9 billion sale was announced last quarter.
A priority for the company going forward will be collaborating with Google Life Sciences to advance development of a surgical robotics program, says Louise Mehrota, vice president of investor relations.
The company spent $139 million during the quarter to resolve class action cases related to failed metal-on-metal hips made by subsidiary DePuy. In addition, J&J sold its Ortho-Clinical Diagnostics group for $26 million.
J&J’s overall earnings for the quarter were down 4.1 percent to $17.4 billion. — Elizabeth Orr