FDA’s Expanded Intelence Approval Will Boost JNJ’s Anti-Infectives Business

The Food & Drug Administration has approved Intelence’s expanded use and makes it the only non-nucleoside reverse transcriptase inhibitor (NNRTI) indicated for this use in both treatment-experienced children and adults with resistance to an NNRTI and other antiretrovirals (ARVs). This is a drug developed by Janssen Products – a subsidiary of Johnson & Johnson.

Antiretroviral drugs are used in the treatments of infections caused by retroviruses like Human Immunodeficiency Virus (HIV). Johnson & Johnson, with a market capitalization of $180 billion, is the biggest player in the healthcare industry and conducts its operations in three segments: consumer healthcare, pharmaceuticals and diagnostics. It competes with the other healthcare bigwigs such as Pfizer, Merck and Abbott Labs.

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Anti-Infective Drugs Market Penetration

Intelence is used in combination with other ARV medications in the treatment-experienced pediatric patients (6 years to <18 years old). With Intelence approved, JNJ will be able to cater to the needs of treatment-experienced young children and adolescents suffering from HIV in the U.S.

This development will help JNJ improve its position in the anti-infectives market. We estimate that its anti-infective drugs segment will derive nearly 25% revenues from Intelence in 2012 and will reach 35% in the coming years. The anti-infectives market is an ever-evolving market as some or the other infective diseases are discovered every now and then.

Supporting this development, we maintain a $72.45 Trefis price estimate for JNJ, approximately 10% above the present market price. The anti-infective drugs segment contributes just under 5% to our price estimate.

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