Little impact on pharma biz, says hurricane hit J&J

By Dan Stanton contact

- Last updated on GMT

GettyImages/Sergio Lacueva
GettyImages/Sergio Lacueva

Related tags: Puerto rico

Back-up generators and secondary manufacturing sites limited the supply and financial impact of Hurricane Maria across J&J’s Puerto Rican pharma facilities, the firm says.

In a quarter marred by hurricanes in Texas, Florida and Puerto Rico, Johnson & Johnson reported robust figures yesterday.

The firm has a presence in all the affected areas, including six facilities in Puerto Rico, the unincorporated US territory devastated by Hurricane Maria three weeks ago. Puerto Rico has a large pharma manufacturing presence and some firms have announced continued power outages, damaged sites and delayed supplies​. 

But in a conference call, CFO Dominic Caruso said J&J’s facilities “fared well”​ considering the magnitude of the storm, and expects little impact on supply of products from the island.

“All of our sites are open with reliable generator power operating in various stages of capacity while the work continues to ramp up to full operations in Puerto Rico,”​ he told stakeholders.

He added the firm has already begun shipping newly manufactured goods from the sites, and is closely monitoring inventories across its global manufacturing network to ensure there are no shortages of essential products.

“While we cannot rule out the potential for intermittent shortages of certain product formats, many of our products have dual production sites and back-up supply outside of Puerto Rico to help meet demand.

“Based on what we know today, we do not foresee any material impact to future results.”

The area most affected was J&J’s medical device business, which Caruso said experienced a minor negative impact to growth due to the hurricanes.

However, “the limited impact we experienced in the third quarter is not the result of any supply disruption, but rather lost surgery days in those areas affected by the storms,”​ he said.

“It remains to be seen whether volumes associated with those lost surgeries will be recouped in future quarters, however, in terms of future supply, we are very well positioned.”

For the third quarter 2017, sales across all divisions came in at $19.7bn (€16.7bn), up 10.3% year-on-year, while net earning grew by 19% to $3.8bn. The pharma division grew 14.6% year-on-year to $9.7bn

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