Is a breakup the way forward for Johnson & Johnson?

Hannah Blake

pharmaphorum

Johnson &amp, Johnson has announced its second-quarter 2012 financial results – and it does not look good for the US healthcare company. Net earnings and diluted earnings were revealed to be 49% down on last year’s second-quarter results, now at US $1.4 billion and US $0.50 per share, respectively.

In addition, with the announcement that J&amp,J has agreed to pay up to US $2.2 billion in order to settle litigation surrounding illegal kickbacks in the marketing of the anti-psychotic drug, Risperdal, things don’t look like they will be picking back up until late next year.

A Wall Street analyst has suggested that the company could find salvation by breaking into smaller companies. According to Jami Rubin, Goldman Sachs, this move would free up money to invest and help the company grow faster, as well as providing a bigger return to shareholders.

Executives believe they see signs that J&amp,J’s business is improving, as stock price has risen 5.7% since the beginning of 2012. However, in comparison, Pfizer is up more than 9% and Abbott Laboratories is up more than 17%.