Johnson & Johnson’s first-quarter profit rose 17 per cent, fuelled by strong growth in the US health products group’s medical devices, particularly orthopaedic implants.

J&J also raised its profit expectations for the year to $3.41-$3.43 earnings per share, from a previous forecast of $3.38-$3.41. It expects sales this year to rise by 7 per cent, the upper end of its previous range.

The performance underscored the potential for high sales and profit growth in the burgeoning medical devices business, and its ability to act as a counterweight to the historically profitable pharmaceuticals business.

Growth in J&J’s medical device business, including its Depuy hip and knee replacement and implant unit, offset the group’s lacklustre pharma business results.

J&J’s drug unit, its most profitable business, has concerned investors with slowing growth due to declining sales on its most important drug Procrit/Eprex and and generic competition after patent expiries for Duragesic and Concerta.

But J&J’s gross margin hit a high point this quarter at 72.9 per cent, according to Bob Darretta, chief financial officer, after medical devices helped offset pharmaceutical struggles.

“Our strategic principle of being broadly based continues to serve us well,” said Bill Weldon, chief executive.

J&J’s first quarter also underlines its interest in acquiring Guidant, another medical device maker. The group agreed in December to purchase the maker of implantable defibrillators and pacemakers for $25.4bn.

On Tuesday, J&J said it had expected the European Union’s competition authorities to take a close look. It still expects to close the deal in the third quarter.

First-quarter profits rose to $2.9bn, or 97 cents per share, compared with $2.5bn, or 83 cents, a year ago. The result was higher than Wall Street expectations. J&J’s sales rose 11 per cent to $12.8bn versus $11.6bn last time.

The group’s medical devices and diagnostics unit sales increased 16 per cent to $4.8bn. Its pharma sales rose 7 per cent to $5.75bn, but saw only 4 per cent increase in the crucial US market. However, two of J&J’s most important products still face competition.

US sales of Cypher, its drug-coated heart stent, fell 27 per cent in the quarter to $317m, compared with last year. It is locked in competition with Boston Scientific’s Taxus stent, and has about 40 per cent US market share.

Procrit/Eprex sales fell 16 per cent to $836m.

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