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(Reuters) – Johnson & Johnson on Tuesday forecast 2019 sales that fell short of analysts’ estimates as the healthcare conglomerate faces increasing competition for some of its older drugs.

FILE PHOTO: A Johnson & Johnson building is shown in Irvine, California, U.S., January 24, 2017. REUTERS/Mike Blake/File Photo

The company’s prostate cancer drug Zytiga, an important growth driver, is expected to be pressured by generic competition, while sales of its rheumatoid arthritis drug Remicade has been slipping due to competition from cheaper biosimilar versions.

The company said it expects full-year sales in the range of $80.4 billion to $81.2 billion, compared with the average analyst estimate of $82.69 billion, according to IBES data from Refinitiv.

In the fourth-quarter, sales rose about 1 percent to $20.39 billion, topping the average Wall Street estimate of $20.20 billion, helped by double-digit percentage growth in sales of Crohn’s disease treatment Stelara and cancer drugs such as Darzalex and Imbruvica.

Strength in the company’s pharmaceuticals business also offset higher costs. In the quarter ended Dec. 31, the company’s litigation expense doubled to $1.29 billion. J&J did not provide a specific reason for the surge in litigation costs and a spokesperson was not immediately available for comment.

The healthcare company is facing more than 11,000 lawsuits over the safety of talc in its products, including baby powder, alleging that its use caused cancer.

Reuters on Dec. 14 published a special report detailing that the company knew for decades that cancer-causing asbestos could be found in the product.

J&J has repeatedly defended the safety of its talc products, saying that decades of studies have shown them be asbestos-free and that they do not cause cancer.

Darzalex and Imbruvica sales saw a double-digit rise in sales to $584 million and $703 million, respectively, in the fourth quarter. Sales of Stelara, also used to treat psoriasis, rose 33.6 percent to $1.44 billion.

While J&J has huge medical device and consumer health divisions, its pharmaceuticals unit has been its main growth driver in recent years.

J.P. Morgan analyst Chris Schott said the positive pharma outlook was tempered by ongoing growth challenges to the company’s medical device and the ongoing talc litigation.

The company posted net profit of $3.04 billion, or $1.12 per share, for the fourth quarter, compared with a loss of $10.71 billion, or $3.99 per share, a year earlier, when it recorded a $13.6 billion charge related to changes to the U.S. tax law.

Excluding items, the company earned $1.97 per share, beating analysts’ average estimate of $1.95 per share.

The company said it expected adjusted 2019 profit in the range of $8.50 per share to $8.65 per share, compared with analysts’ expectation of $8.60 per share.

Shares of the company were down 1 percent at $129.35 in early trading.

Reporting by Manas Mishra in Bengaluru; Editing by Saumyadeb Chakrabarty

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