WASHINGTON, D.C. - U.S. health regulators said on Friday they do not expect any shortage of children's pain and allergy medications despite Johnson & Johnson's inability to resume production until at least next year.
J&J, which has recalled more than 40 products including Tylenol, makes an estimated 70 percent of liquid, over-the-counter medications for children. But the Food and Drug Administration said that it is monitoring the situation and does not foresee a shortage.
"There are many alternative products available — including generics — and we do not anticipate a shortage in supply," FDA spokeswoman Elaine Bobo told Reuters.
On Thursday, J&J said it did not expect to restart production of most consumer medicines made at its Fort Washington, Pa., plant before the end of the year.
The plant shut down in late April when the diversified healthcare company announced a widespread recall of infants' and children's liquid over-the-counter products made there. U.S. inspectors found filthy equipment and contaminated ingredients at the factory, which also made the pain medicine Motrin and allergy drugs Benadryl and Zyrtec.
"FDA continues to monitor the situation, and we are in continuous communication with McNeil Consumer Healthcare regarding start-up of production at the Fort Washington plant," FDA's Bobo said.
The suspension also affected adult nonprescription medications made at the facility, McNeil Consumer Healthcare said. All told, average annual sales of the products made at the plant over the last three years were about $650 million.
J&J said it has not yet completed plans to resume production at the plant and it conducts a quality assessment across its manufacturing operations.
After the announcement, analysts trimmed their sales and earnings estimates for J&J, based in part on the delay.
Leerink Swann analyst Rick Wise cut his 2010 sales forecast by $1.2 billion, reflecting not only the manufacturing suspension but also the "dramatic and sustained" depreciation in the euro versus the dollar since the end of March.
Wise expects 2010 sales of $63.4 billion, just below J&J's forecast of a range of $63.5 billion to $64.5 billion.
Wise also cut his 2010 earnings estimate by 10 cents a share to $4.80 per share. He noted that estimate falls within J&J's projected range of $4.80-$4.90 per share.
"Barring any further product recalls, we believe J&J can return to double-digit EPS growth in 2011," Wise said in a research note.
While the recall has not led to a huge financial hit for the giant diversified healthcare company, it threatens to severely damage J&J's reputation and has prompted an investigation by Congress.
U.S. House of Representatives Oversight Committee Chairman Edolphus Towns is planning a second hearing on the recall with J&J's Chief Executive William Weldon as a witness.
J&J's continued plant problems could be a boost to Perrigo Co, which manufactures generic versions of popular over-the-counter medications. A spokesman for the company could not be immediately reached for comment.
Privately-held Blacksmith Brands Inc, which makes PediaCare brand cold and allergy products that are also made at J&J's Pennsylvania plant, has recalled four of its children's medications.
J&J shares were off 0.8 percent to $59.11 in late morning trade on the New York Stock Exchange on Friday, while shares of Perrigo were up 1.3 percent to 58.50.
(Reporting by Susan Heavey; additional reporting by Lewis Krauskopf in New York; Editing by Tim Dobbyn)