BTIG Lowers Remicade Outlook for Johnson & Johnson (JNJ); Affirms 'Neutral' Rating
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BTIG is trimming its outlook on Remicade for Johnson & Johnson (NYSE: JNJ) following recent litigation. The firm reiterates its Neutral rating on Johnson & Johnson.
Analyst Dane Leone commented,
We are lowering our forecasts for Remicade in light of the District Court ruling to invalidate a key patent protecting the Remicade franchise from a biosimilar launch of Inflectra (Celltrion, 068270, Not Rated/ Pfizer, PFE, Not Rated). Our 2018 forecast for Remicade is now ~$5.7bn, down from ~$6.6bn, as the ruling increases the chances that Remicade will face biosimilar competition during 2017. Importantly, a Federal judge set a tentative date of February 13th, 2017 at 9:30AM for the Appeals Court. JNJ is continuing the appeal process in the proceedings related to the ’471 patent before the USPTO, awaiting an oral hearing. Also, management indicated that guidance for 3 – 4% operational growth would not change even if Inflectra was launched during 4Q16.
Our forecast for a cumulative -20% decline in US Remicade sales by YE2018 incorporates a 2H2017 US biosimilar launch: Our new 2018 Remicade forecast is ~$5.7bn, below the consensus estimate of ~$6.6bn as we model a decline of -10% during 2H2017 based on a biosimilar launch of Inflectra, with a YoY decline of -15% for 2018. Comparisons are difficult, but based on the experience with other blockbuster biosimilar & generic launches, the minimum first year share loss for the branded product has been -17%, the analyst noted.
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