Cork unit of J&J records €296m loss after provisions for claims over anti-psychotic drug

The company recorded a net provision of €418.34 million in response to the firm receiving personal injury claims over its anti-psychotic drug, Risperdal
Cork unit of J&J records €296m loss after provisions for claims over anti-psychotic drug

Gordon Deegan

A Cork-based unit of pharma giant, Johnson & Johnson (J&J) recorded pre-tax losses of €296.15 million due last year to the firm making provisions for claims concerning an anti-psychotic drug made by J&J.

New accounts lodged by Janssen Pharmaceutical Sciences Unlimited show that the firm recorded the pre-tax losses of €296.15 million after recording a pre-tax profit of €155.48 million in the prior year - a negative swing of €451.63 million.

The firm's revenues declined by 18 per cent from €714.33 million to €587.4 million in the 12 months to the end of January 3rd 2021.

Owned by US headquartered J&J, the Irish unit was on course to make a profit but for the firm recording a net provision of €418.34 million in response to the firm receiving personal injury claims over its anti-psychotic drug, Risperdal.

The €418.34 million net provision on its profit and loss account for last year followed a net provision of €99.68 million in the prior year.

Risperdal

A note attached to the accounts states that the firm sold Risperdal to other affiliate companies who made the trade sales.

The note states that lawsuits have been filed against the affiliate firms in the US and Canada, but that Janssen Pharmaceutical Sciences Unlimited bears the product liability risk.

A separate note discloses that last September, J&J entered a settlement in principle concerning all outstanding Risperdal claims in the US.

The period covered by the accounts includes the early phases of the Covid-19 pandemic and according to the directors’ report, the business recorded a decrease in sales “due to the decrease in demand experienced in nearly all product categories”.

The directors state that “despite ongoing challenges in the marketplace, the directors are satisfied that they will be able to manage the company’s activities to enable it to trade profitably into the future”.

During the year, the firm paid out a dividend of €100 million to Janssen Pharmaceutical.

The directors state that the Covid-19 pandemic has not had a significant impact on business to date but could cause a risk to the company’s supply chain in the future.

Numbers employed by the firm last year increased from 412 to 446 and staff costs increased from €54.82 million to €60.16 million.

The loss for last year also takes account of non-cash depreciation and amortisation costs of €88.18 million.

The bulk of the company’s sales last year occurred in the European Middle East and Africa (EMEA) region at €474.3 million.

The firm’s shareholder funds last year reduced from €1.06 billion to €683.27 million.

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