Recall of Artificial Hip Causes Johnson & Johnson 2012 Earnings Forecast to Dip
February 20, 2012
The pharmaceutical giant, Johnson & Johnson, has been given a 2012 earnings forecast which is below the previous estimates present by financial analysts due to the number of DePuy hip replacements which were recalled. In fact, recent reports state Johnson & Johnson takes $3 billion charge for hip recall. In 2010 it was discovered that the DePuy metal-on-metal hip replacement devices were shedding metal fragments and Johnson & Johnson issued a recall for those particular hip replacements. The metal fragments which were shed into the body were found to cause disabling injuries in some recipients, and the toxicity from the chromium and cobalt debris can cause the surrounding tissues to suffer necrosis or death.
Years of Potential Exposure to Toxic Metals for Hip Implant Recipients
Because the DePuy implants were specifically designed for younger patient, these recipients may be exposed to the toxic metals for many years. Many of the lawsuits currently being filed allege that Johnson & Johnson should have recalled the devices much sooner and that they continued to sell the hip implants long after they were aware of the unusually high failure rate. As early as 2008 Johnson & Johnson received complaints regarding loosening parts, infections, sensitivity to the metals of the implant, dislocated hips and fractures, and DePuy’s own internal data revealed a 12% revision surgery rate for the resurfacing system and a 13% rate for the ASR XL.
Johnson & Johnson Reports Higher than Expected Fourth Quarter Earnings
Fourth-quarter charges have allowed funds in the amount of $800 million dollars to be set aside for the patients and their attorneys who are involved in the DePuy hip replacement lawsuit. Analysts are unable to determine just how high the eventual costs will be as there are strong indications that more lawsuits are to come. The 2012 Johnson & Johnson corporate earnings forecast was between $5.05 and $5.15 per share as opposed to the Wall Street view of $5.21 per share. Despite the DePuy hip extensive recall, Johnson & Johnson reported higher than expected fourth-quarter earnings due largely to the sale of new prescription drugs and favorable corporate taxation. When all was said and done, Johnson & Johnson earned $218 million dollars in their fourth quarter alone, which translated into approximately 8 cents per share.
Rise in Global Sales Due to New Drug Applications
Johnson & Johnson, based out of New Jersey, reported that global sales rose 3.9% in the fourth quarter of 2011, or $16.26 billion dollars, yet the company was only able to net $218 million of that due to the product recalls, litigation and patent battles currently waged against them. Johnson & Johnson is waiting to hear from the FDA regarding their new drug application for Xarelto, an oral anticoagulant meant to lower cardiovascular events for those who suffer from acute coronary syndrome as well as an application for Nucynta, an oral analgesic for neuropathic pain in diabetics.
Corporate Profits vs. Patient Suffering
Johnson & Johnson reported spending some $109 million dollars in DePuy hip recall litigation expenses during the third quarter of 2011, while still managing to bring in over $1.3 billion dollars in worldwide sales of orthopedic joint replacements. This level of profit feels like a slap in the face to the thousands of patients who are currently suffering from implantation of a DePuy metal-on-metal hip replacement. These patients are dealing with chronic pain and an uncertain future while DePuy, the subsidiary of Johnson & Johnson racks up sales and income.
Anyone who has undergone a DePuy metal-on-metal hip replacement and suffered negative health issues as a result should contact an experienced product liability attorney as soon as possible to ensure their subsequent surgeries and medical expenses are fully covered. Should you decide to pursue a DePuy hip replacement lawsuit, an experienced attorney can ensure your rights are protected.