Tomahawk, WI 2/24/2014 (Basicsmedia) – Patent expirations are a big headache for most of the big pharmaceutical giants including Johnson & Johnson (NYSE:JNJ). They have grown accustomed to the market realities through patent protection that protected their markets and allowed them to charge rates at their own will.

JNJ’s Patent Cliff:

Johnson & Johnson (NYSE:JNJ) also faces a patent cliff though a less severe one.  Two of its drugs contributing more than 11% of its total revenues are set to lose their patent protection in 2017 and 2018. Velcade will lose its patent in 2017 and Remicade will lose its European patent in 2015 and its U.S. patent in 2018. These cancer and autoimmune disease drugs contributed $1.7 billion and $6.7 billion in JNJ’s total revenues in 2013 respectively. The company is focusing on new drug development; it has already got a number of FDA approvals recently. The notable approvals are simeprevir for hepatitis C and canagliflozin for diabetes type 2. Both Hepatitis c and Diabetes are expected to assume epidemic proportions in the company years. Another notable drug is ibrutinib being developed for the treatment of mantle cell lymphoma.

These steps will ensure that the company will see a growth in revenues to $77.5 billion in 2015 from $71.3 billion in 2013.

Diversity To The Fore:

Another thing that works on Johnson & Johnson (NYSE:JNJ)’s side is its diversity. The company is restructuring itself so that it can offer faster to-market timings. It recently sold off one none core division for $4 billion. By focusing on its core competencies, the company can generate better revenues and bigger profit margins. Currently the diagnostic equipment and pharmaceutical divisions contribute 40% of the total revenues each with the balance 20% coming from consumer goods.

Johnson & Johnson (NYSE:JNJ) also took the unusual step of sharing its information with everybody. The company has decided to open up data of its clinical trials to researchers. It was sharing this data selectively earlier.

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