From the pharma C-suite: J&J on Asia, emerging markets in Q2

Print 20 July 2015
EJ Lane / FeircePharmaAsia

FiercePharmaAsia combs earnings calls by major drug companies for notable and quotable nuggets on emerging markets and Asia to track the latest sales trends and insight into business outlooks in markets as diverse as China, India and Japan.

J&J CEO Alex Gorsky

For the second quarter of the year, Johnson & Johnson ($JNJ), as usual, had the pole position on reporting, and CEO Alex Gorsky was on hand with a midyear update. He had a bit to say on growth in emerging markets. He also discussed China with fellow executives.

Of note on this call as well was Sandi Peterson, Group Worldwide chairwoman, who set the stage on how the company's efforts in the consumer space are aiding wider sales in Asia and emerging markets."Our iconic consumer brands are J&J's face to the world," Peterson said on the July 14 earnings call with analysts.

"They're how we are known by millions around the globe. They are our first point of entry into emerging markets, so they really are very important to the overall enterprise."

Gorsky later backed that up on the consumer focus of Peterson as crucial to sales of pharmaceuticals and medical devices as well.

"By the way, for Johnson & Johnson, it not only operates that way to drive growth in consumer but it acts also as a way to increase our uptake in our other businesses, particularly in those growth markets," he said.

Though he did note new consumer sales channels in China have compounded lower demand this quarter, possibly a reference to players such as Alibaba Healthcare ($BABA) and JD.com looking to build online consumer healthcare sales.

Still, Peterson said the emerging market segment in consumer sales is a key driver.

"We continue to grow at double-digits in our lead emerging markets," Peterson said.

"BRIC (Brazil, India, Russia and China) market operational sales are up double-digits, driven by continued strong performance of Russia, Brazil and China."

Dominic Caruso, vice president of finance and chief financial officer, however, responding to a question from Morgan Stanley analyst David Lewis, was a bit more specific on China--and more cautious.

"So, we have seen in China some slowdown. I wouldn't call it acute. There's some dynamics of course of generic competition in China and an overall slower growth in economic growth," he said.

"But I think we're well-positioned; we've been in China for many, many years. We have a good footprint there. We obviously manufacture there as well. Our brands continue to get good uptick there. Of course, we're not in the generic part of the pharmaceutical business in China because we're focused more on innovation in that market. So I wouldn't call it acute, but I would say we've seen some slowdown in the overall market growth in China."

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