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[IP] For Propulsid-takers

March 24, 2000

Johnson & Johnson Tumbles After Drug Pulled

NYTimes.com/TheStreet.com, 11:30 a.m.

Johnson & Johnson shares fell sharply Friday after the company withdrew from 
the market a drug under scrutiny by the Food and Drug Administration. 
The shares tumbled 6 15/16, or 9 percent, to 73 1/16 in midday trading as 
Wall Street analysts slightly lowered their earnings estimates. 

Titusville, N.J.-based Jannsen Pharmaceutica, a unit of Johnson & Johnson 
that sells the heartburn medication cisapride under the name Propulsid, said 
it will stop marketing the drug and distribute it only to patients who have 
not been helped by other treatments. 

The FDA approved Propulsid for heartburn treatment in 1993, but the agency 
began receiving reports of patients dying by the next year. The agency, which 
has received reports of 80 deaths related to the medication, had scheduled an 
April 12 meeting to discuss proposals to ban or seriously restrict the drug's 

Though several Wall Street analysts lowered their ratings on the stocks and 
predicted sizeable reductions in revenue, most expected little change in the 
company's overall earnings. 

"This is news that we've been discussing for months," said Frederick Wise, 
analyst for Bear Stearns. "Many feared that the drug would be taken off the 
market completely. It has not." Wise rates the stock a buy, and his firm has 
not done underwriting for Johnson & Johnson. 

The company will still sell the drug until mid-July; then doctors will be 
required to document that other drugs have failed before prescribing 

Sales of the drug totaled around $950 million in 1999, and the company had 
previously told analysts it now expects to make around $250 million to $300 
million in worldwide sales this year. Analysts predict total annual revenues 
of around $30 billion for the company this year. 

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