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Johnson & Johnson’s (JNJ - Analyst Report) recently gained approval from the US Food and Drug Administration (FDA) for the expansion of Simponi’s label. The FDA granted Simponi approval for the treatment of adults with moderately to severely active ulcerative colitis (UC) in case of corticosteroid dependence or when the patients have not responded sufficiently to or are intolerant to oral aminosalicylates, oral corticosteroids, azathioprine, or 6-mercaptopurine.

This label expansion makes Simponi the first and only subcutaneously administered anti-tumor necrosis factor (TNF)-alpha therapy to gain approval for the induction and maintenance of clinical response and improvement of endoscopic appearance of the mucosa during induction.

As per the Crohn’s & Colitis Foundation of America, about 700,000 people in the US suffer from UC.

Simponi is already approved for several indications like the treatment of moderate to severe rheumatoid arthritis (RA) with methotrexate, active psoriatic arthritis alone or with methotrexate and active ankylosing spondylitis in adults.

We believe Simponi, which posted sales $607 million in 2012 (up 48%), has blockbuster potential - approval for the UC indication should boost sales further.

Johnson & Johnson’s Remicade is also approved for the treatment of moderately to severely active UC. Other treatments include AbbVie’s (ABBV - Analyst Report) Humira.

Johnson & Johnson currently carries a Zacks Rank #3 (Hold). While we expect Johnson & Johnson to continue facing headwinds in the form of pricing pressure, manufacturing issues, US healthcare reform and weak medical devices segment performance, we believe the diversified business model, lack of cyclicality, strong financial position will continue helping the company pave its way through tough situations.

Companies that currently look well-positioned include Salix Pharmaceuticals, Ltd. (SLXP - Analyst Report) and Santarus, Inc. . Both are Zacks Rank #1 (Strong Buy) stocks.

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