Janssen China Rebrands as Johnson & Johnson Innovative Pharmaceuticals, Files Prospectus for New Entity

As time goes by, Johnson & Johnson will lose its iconic pharmaceutical and R&D brand, Janssen.

On September 14, Johnson & Johnson announced a brand update, under which its two major businesses—medical technology and pharmaceuticals—will be integrated under the Johnson & Johnson name. The pharmaceutical division, Janssen, will be renamed Johnson & Johnson Innovative Medicine, while the medical technology division will remain unchanged.

Before Xian Janssen, other pharmaceutical brands such as Wyeth and Schering also disappeared, and this list will continue to grow in the future. From another perspective, they are being reborn in a different way; the better outcome is that their products can ultimately realize their true value. Of course, many brands have vanished without a trace after the dust settled. But putting aside all these, behind these names lies an indelible chapter in the history of pharmaceuticals.

Glorious History

Talking about Xian Janssen's nearly 40 years in China, it has been full of ups and downs.

The story begins with Dr. Paul Janssen, the founder of Xian Janssen. In 1976, Dr. Janssen first came to China and became the first foreign visitor to see the Terracotta Warriors. In 1985, driven by a special affection for China, he returned to the ancient city of Xi'an and established the joint venture Xian Janssen Pharmaceutical Ltd., which was strategically located on the essential route leading to the Terracotta Warriors.

Thus, Xian Janssen has become one of the earliest multinational pharmaceutical companies to enter China.

Speaking of Xian Janssen's glorious history, it is no exaggeration to say that it pioneered a new era in pharmaceutical marketing. It was the first to introduce advanced marketing concepts to China, trained the earliest group of pharmaceutical representatives domestically, and established the earliest academic sales system and corporate culture in the pharmaceutical industry, marking a golden age for pharmaceutical representatives.

At that time, Xian Janssen once became the benchmark for foreign pharmaceutical companies in China. Of course, this was not only because it had leading performance, but more importantly, it provided the industry with a large number of senior executive talents, earning it the title of "Whampoa Military Academy" in the industry. However, within Janssen, employees preferred to call it "Janssen University." To this day, the E Pharma Manager's database still retains old photos exclusive to that era.

Along the development, every leader of Xian Janssen has made significant contributions to the cultivation of talent, gradually fostering the "Eagle, Goose, and Beaver" cultures. These symbolize initially taking on challenges like an eagle, then collaborating like a goose, and finally creating work like a beaver. The "Eagle, Goose, and Beaver" culture is truly an innovation of Xian Janssen.

It is no exaggeration to say that it was the most glorious period for the people of Janssen, and almost no pharmaceutical company could escape the "Janssen system."

To date, there are countless outstanding talents who have emerged from the training system of Xian Janssen. Most of these well-known professional managers are still active in the pharmaceutical industry market. For instance, Bian Xin, President of Roche China; Guohong Shan, President of Takeda China; and Dr. Yi Fei Zhu, Chief Commercial Officer of Ascentage Pharma, are all "accomplished disciples" of Xian Janssen. Of course, many other talents have also ventured out on their own.

At that time, with this invincible team, Xian Janssen's products became deeply rooted in people's hearts, and its OTC products dominated the market, such as Daktarin and Motilium… In that era, Xian Janssen was once considered synonymous with commonly used medicines.

However, it is regrettable that Xian Janssen has experienced a somewhat "fall from grace" in recent years. Some former professional managers who left Xian Janssen feel pity for this old employer where they once spent their youthful years, and some even express frustration over its lack of progress.

Nowadays, the "name change" has evoked even more sentiments. In the hearts of many pharmaceutical professionals, this signifies the end of an era.

The Reshaping of a Glorious Journey

In 2008, Xian Janssen's then-president Binfu Xie resigned, General Manager of the Prescription Drug Division Weiqiang Liang resigned, Medical Director Ning Xu resigned, and Public Relations Director Xi Min resigned; in 2009, Public Affairs Director Jianzheng Hou resigned, and Senior Human Resources Director Wei Ren resigned.

Two years of frequent personnel changes are considered by the industry to be the beginning of Xian Janssen's decline after reaching its peak.

In summary, Xian Janssen has experienced the transition from the glory of OTC to the decline of prescription drugs, with a gap in cross-over products, talent loss, weakened training and management capabilities, recalls of prescription drug products, and the full implementation of centralized procurement... Each change has taken its toll.

In retrospect, "success stems from the sales strategy, and failure also stems from the sales strategy." Everyone in the management wanted to continue the glorious sales of OTC, and everyone wanted to leave a mark of achievement, which ultimately led to no one's strategy being continued.

The strategy formulated by Fan Yamo, who became the president of Xian Janssen in 2002, was a deep cultivation strategy, which involved having sales personnel delve into grassroots levels to expand channel coverage and penetration. By 2006, when Xie Bingfu from Sino-American Shanghai Squibb took over as president, the sales strategy shifted to concentrating advantages to focus on more than 20 key cities. Fan Yamo's "expansion" and Xie Bingfu's "contraction" directly led to the loss of marketing personnel. Shortly thereafter, within two years, Xian Janssen welcomed a new Korean president, Park Ji-ho, who advocated for a strategy of "strengthening prescription drugs while deeply cultivating OTC." This involved enhancing the development of channels, networks, and terminals for prescription drugs, while OTC reverted to Fan Yamo’s sales strategy.

Amid the back-and-forth of strategy, it’s not just the turnover of sales personnel—what’s also being eroded is the talent cultivation system that Janssen has built up over many years. The title of “Whampoa Military Academy” of the pharmaceutical world now comes with the prefix "former." In 2013, a salesperson from the specialty drugs department of Xian Janssen told E Pharma Manager that Xian Janssen's training for pharmaceutical representatives had dwindled significantly. A new colleague who had been with the company for a year had never received any training from Xian Janssen. The training department of Xian Janssen was left with very few people, as most had already resigned.

In addition to personnel changes, there is also a "split" in the product sales strategy — clinging to high-performance OTC products while tilting resources toward prescription drugs, yet the team remains undivided.

Historical data shows that around 2005, Johnson & Johnson's headquarters in the United States gradually adjusted Janssen's positioning towards becoming a prescription drug production and sales company. This overall strategic adjustment also caused Xian Janssen's sales resources to tilt towards prescription drugs, with OTC sales profits being invested into the promotion of prescription drug products. However, there was no separate management of the OTC and prescription drug sales teams. It is reported that before the merger of Xian Janssen’s OTC business with Shanghai Johnson & Johnson Pharmaceutical, the OTC sales department was uniformly responsible for Xian Janssen's sales channels, while the professional and specialty products sales department only managed pharmaceutical representatives. Additionally, some prescription drugs were also sold by the OTC product team.

At the same time, following the OTC products with annual sales exceeding 1 billion yuan in China, such as Motilium and Daktarin, Xian Janssen's subsequent products have gradually faced a "shortage of new offerings." Products developed to extend the lifecycle, such as Jin Daktarin and Motilium suspension, also failed to make much of an impact.

Perhaps it was "an unlucky year," as Xian Janssen finally focused on the introduction of prescription drugs, only to be associated with Johnson & Johnson, the "recall king" of the United States.

• In February 2011, Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson, initiated a large-scale global recall of 70,000 vials of the antipsychotic drug Risperdal Consta injection, and Xian Janssen Pharmaceutical Ltd. was implicated;

• In November 2011, the CFDA required Xian Janssen to immediately initiate a voluntary recall of all batch numbers of Caelyx according to the Regulations on Drug Recall, and to immediately cease sales of Velcade;

• In 2012, Johnson & Johnson agreed to pay $2.2 billion to settle a U.S. government investigation into the illegal marketing of its antipsychotic drug Risperdal and other medications; Xian Janssen was also held accountable in the Chinese market.

A series of events ultimately damaged the reputation of Xian Janssen's prescription drug business before it could reach its full potential. The side effects were directly reflected in the performance figures: In 2012, Xian Janssen's sales revenue was 5.133 billion yuan, a decrease of 1.12% compared to 2011. Although this figure may seem small, it is particularly abnormal when contrasted with the average 20% growth of China’s pharmaceutical market.

However, the story of Xian Janssen's OTC and prescription drugs concluded in 2017 when the OTC business integrated with Shanghai Johnson & Johnson Pharmaceutical to form "One China OTC" as the "Core Product Division." Xian Janssen, representing Johnson & Johnson's innovative drug layout in the Chinese market, is now experiencing a rebirth after its difficulties.

From 2016 to 2021, during Asgar Rangoonwala's five-year tenure as President of Xian Janssen, the company successfully launched 27 products and included 52 innovative drugs in the national medical insurance catalog. In 2018, Xian Janssen obtained approvals and launched 14 new drugs or new indications in China, setting a record for Janssen. To date, Xian Janssen has covered multiple therapeutic areas in the Chinese market, including oncology, immunology, infectious diseases and vaccines, neuroscience, cardiovascular and metabolic diseases, and pulmonary arterial hypertension. Several blockbuster products such as Guselkumab Injection, Ustekinumab Injection, Golimumab Injection, and Daratumumab Injection have been launched in China and included in the medical insurance catalog.

Those Years, the Old Brands That Disappeared in the Sunshine

In the history of pharmaceutical development, there are other well-known pharmaceutical companies whose brand names have completely disappeared from the spotlight for various reasons.

In an era of rampant acquisitions, there is another rule for the survival of large pharmaceutical companies: being acquired by even larger pharmaceutical companies.

At the beginning of the 21st century, pharmaceutical giants spent astonishing amounts on acquisitions to bring star pharmaceutical companies under their wings.

Pfizer's heavy acquisitions of Pharmacia, Warner-Lambert (which brought the drug Lipitor to Pfizer), and Wyeth all contributed to its status as the "largest pharmaceutical company in the universe." Notably, whenever Pfizer's pneumonia vaccine "Prevnar" and Enbrel are mentioned, one must revisit one of the largest mergers and acquisitions of the century: Pfizer's acquisition of Wyeth.

In 2009, Pfizer acquired Wyeth through a cash-and-stock deal valued at approximately $68 billion, marking Pfizer's official transition into the biologics sector and establishing its foundation in the research, production, and sales of biopharmaceuticals.

Wyeth's addition brought Pfizer 27 biopharmaceuticals, including Enbrel, and 6 bio-vaccines, including Prevnar. In the second year after the acquisition, Pfizer’s sales exceeded $500 billion for the first time.

Although the Prevnar vaccine did not bring significant revenue to Pfizer in the short term after the acquisition, by 2014, the Advisory Committee on Immunization Practices (ACIP), a subordinate organization of the U.S. Centers for Disease Control and Prevention (CDC), recommended that people aged 65 and above receive the Prevnar 13 vaccine. This event drove high performance growth in the following two years.

However, this classic large-scale acquisition also symbolizes the final glory for Wyeth, a relatively high-quality biotechnology company (founded in 1991), with subsequent honors belonging to Pfizer. After the acquisition, Wyeth's name officially disappeared from the list of MNC revenue giants.

Thereafter, Pfizer divested some non-core businesses to consolidate its own territory. In 2012, Pfizer sold Wyeth's nutrition business to Nestlé for $11.85 billion.

Now, milk powder and other products named "Wyeth" have not completely disappeared, but the fate of another century-old pharmaceutical company named "Schering" is different.

In 2006, Germany's Merck publicly expressed its hope to acquire Germany's Schering pharmaceuticals for approximately $17 billion. Schering, a company specializing in oral contraceptives founded in 1851, had a history of over a century and reported sales exceeding €5 billion in the 2005 fiscal year. However, Merck's dream did not come true as Bayer soon proposed a $20 billion acquisition of Schering. Shortly thereafter, in early 2007, Bayer officially acquired Schering and merged its prescription drug business with Schering’s pharmaceutical operations to form Bayer Schering Pharma. Since then, "Schering" has been deeply tied to Bayer but has hardly generated any discussion.

In 2009, another major pharmaceutical company that once had revenue exceeding tens of billions of dollars — Schering-Plough (Schering's U.S.-based company, which was taken over by the U.S. government after World War II and privatized) — also had a "disappearance" story that became a classic.

Schering-Plough was once ranked 11th among global pharmaceutical companies and 7th in the U.S. pharmaceutical industry. In March 2009, Merck announced a $41.1 billion acquisition of Schering-Plough. After the acquisition, Merck became the second-largest pharmaceutical company in the U.S. Notably, this move enabled Merck to subsequently gain the blockbuster drug Keytruda (purchased by Schering-Plough from Organon in 2007). Additionally, Schering-Plough also owned Claritin, an antihistamine drug.

Like Wyeth, Schering and other "disappeared" brands, more may appear in the future due to mergers, acquisitions, and other reasons. They are reborn in another form; a better outcome is that their products can eventually realize their true value. However, many brands fall into oblivion after the dust settles. What is worth remembering is that behind these names lie indelible chapters of pharmaceutical history.

Source | E Pharm Manager человек