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J&J pledges to recapture luster of McNeil OTC brands

NEW BRUNSWICK, N.J. — Johnson & Johnson Tuesday morning pledged significant support behind the relaunch of several McNeil Consumer products into the marketplace in 2012, and feels confident impacted brands — Tylenol and Motrin, among others — will be able to recapture market share, despite significant private-label erosion.

"One bit of data that we saw — even though private label has taken a particular amount of share in that part of the market is that trust of the McNeil brands among moms is still two-times the levels of competing products," J&J VP finance and CFO Dominic Caruso said during an analyst conference call Tuesday morning. Caruso told analysts the McNeil product relaunches would be reintroduced with a combination of brand marketing, couponing and dosing innovations to recapture its one-time loyal consumers. "We hope that the loyalty that these brands [have enjoyed] over the years will stay with us," Caruso said. Caruso projected the overall marketing and merchandising initiatives will elicit a "surround-sound impact and get the consumers back to the loyal consumers they were prior to the recall."

U.S. sales of over-the-counter medicines were significantly impacted by the suspension of manufacturing at the McNeil Consumer Healthcare facility in Fort Washington, Pa., J&J reported. Sales of the company's OTC/nutritionals products were down 24.2% to $332 million. Two beauty products — Neutrogena and Dabao skin care products — were positive contributors to operational results, however. Within skin care, J&J reported a 20.9% lift to $376 million.

For the third quarter ended September, Johnson & Johnson reported U.S. sales of $6.9 billion, down 3.7% vs. the corresponding year-ago period. Sales were down across its U.S. businesses — consumer was down 4.5% to $1.2 billion; pharmaceutical was down 6.1% to $2.9 billion; and medical devices/diagnostics was down 0.8% to $2.8 billion.

J&J reported U.S. and international combined sales of $16 billion, an increase of 6.8% over the year-ago period.

In September, McNeil-PPC completed the acquisition of full ownership of the Johnson & Johnson-Merck Consumer Pharmaceuticals in the United States. That business will be renamed McNeil Consumer Pharmaceuticals and will continue to market products under the Pepcid, Mylanta and Mylicon brands.


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