J&J Gets Label Expansion

Last week, Johnson & Johnson (JNJ) announced the marketing approval of Invega extended-release tablets either for solo use or in combination with mood stabilizers and antidepressants for treating schizoaffective disorder. The disorder results in symptoms similar to schizophrenia in addition to mania or depression.

On the same day, the US agency gave its nod of approval to Invega Sustenna -- a once-monthly, injectable version of Invega to treat schizophrenia in adults. It will be marketed in the US by Janssen, a unit of Johnson & Johnson.

Invega Sustenna has been developed using the proprietary technology NanoCrystal Technology, which is a registered trademark of Elan Pharma International Ltd, Ireland, a subsidiary of Elan Corp. plc (ELN). The FDA approved the drug on the basis of two international, randomized, double-blind placebo-controlled studies of schizoaffective disorder patients with acute symptoms.

Approximately, one percent of the world’s population suffers from schizophrenia, which prevents a person from thinking clearly and distinguishing between reality and imagination. While there is no cure for schizophrenia, the symptoms and the risk of relapse can be managed with appropriate treatment that includes continuous, long-term therapy with proper medications.

As a reminder, Invega was initially approved in December 2006 to treat schizophrenia. The drug’s predecessor, Risperdal -- which is used to treat schizophrenia and symptoms of bipolar disorder (manic depression) -- lost its patent in 2008.  Risperdal is available as a generic but Johnson & Johnson has been focusing on transferring patients to Consta (long-acting Risperdal) and the newer Invega product.

Total franchise sales were $3.8 billion in 2008.  Invega sales should continue to ramp in the coming years due to the label expansion, which includes the recent FDA approval.
 
We have a Buy rating on the company’s shares based on its diverse and deep product mix, lack of cyclicality, strong financial position, and consistent record of earnings growth.

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