Johnson & Johnson in Ireland records €296m loss

Pharma giant made provisions for claims concerning an anti-psychotic drug

Johnson & Johnson is headquartered in New Brunswick, New Jersey, US. Picture: Mark Kauzlarich/Bloomberg

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

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

The firm's revenues declined by 18% from €714.33m to €587.4m in the 12 months to the end of January 3, 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 €418.34m in response to the firm receiving personal injury claims over its anti-psychotic drug, Risperdal.

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

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 €100m 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 €54.82m to €60.16m.

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

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

The firm’s shareholder funds last year reduced from €1.06bn to €683.27m.