This problem explains why JNJ felt forced to pay a high P/E to
The Merritt Island water distribution point is now shut down. All of the water has been distributed (35,000 cases). Sept. There is one biosimilar competitor; a second is expected in several months. So as new drugs ramp, Remicade will likely shrink rapidly; and that’s just one aging drug.This problem explains why JNJ felt forced to pay a high P/E to acquire Actelion rather than produce growth via more internal drug development.JNJ has grown revenues at about a 1.9% CAGR since 2008, when sales were near $64 B iphone 8 case, and the share count has only come down 2 3% in total since then. EPS has grown faster since then due largely to the successful shift to a greater percentage of growth of the higher margined pharma division, but net operating margins have only increased 2 3% in total since then, and some of the improvement has come from a slightly lower tax rate.The company is buying growth on the one hand and selling off assets on the other hand.
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