April 17 (Bloomberg) -- Johnson & Johnson, the world's biggest health-care products company, said first-quarter earnings fell 22 percent after a write-off for research costs at a heart-device maker it acquired.

Without those costs, profit rose more than analysts estimated, sending J&J's stock higher today. The company also benefited from the $16.6 billion purchase of Pfizer Inc.'s consumer health unit, J&J's largest acquisition ever.

Revenue jumped 15 percent, to $15 billion, helped by Listerine mouthwash and Sudafed cold pills from the Pfizer purchase. The consumer products may help offset the loss of revenue when J&J's top-selling migraine pill Topamax and schizophrenia drug Risperdal lose patent protection next year.

``J&J is in a holding pattern where they face several tough quarters ahead for drugs and devices, and the consumer unit is the bright spot,'' said Bruce Cranna, an analyst with Leerink Swann & Co. in Boston, in an interview.

Net income dropped to $2.57 billion, or 88 cents a share, from $3.31 billion, or $1.10, a year earlier, the company, based in New Brunswick, New Jersey, said in a statement. Sales rose to $15 billion. J&J reported an after-tax charge of $807 million for writing down research and development at Conor MedSystems Inc., the acquired stent maker.

When those costs are excluded, J&J had a profit of $1.16 a share in the first quarter, beating the average estimate of $1.06 in a Bloomberg survey of 13 analysts.

U.S. accounting rules forces companies to write down any uncompleted research purchased during an acquisition.

Shares Rise

Shares of J&J rose $1.53, or 2.4 percent, to $64.55 at 4:01 p.m. in New York Stock Exchange composite trading. JNJ gained 12 percent in the 12 months through today.

``Our solid first-quarter results demonstrate the strength of our broadly based businesses, especially the strong performance of our pharmaceutical business,'' William Weldon, chairman and chief executive officer of the company, said in the statement.

J&J raised its full-year earnings estimate to $4.02 to $4.07, from the prior range of $3.88 to $3.93. For 2006, the company earned $3.73.

Sales from medical devices rose 6.2 percent to $5.3 billion. Sales were bolstered by Vistakon disposable contact lenses and DePuy artificial hips and knees.

Cypher Stent

Revenue from drug-coated stents, including Cypher, fell 26 percent to $530 million after studies linked the devices to elevated risk of fatal blood clots. J&J is still the leading worldwide seller of stents, with a 48 percent market share, the company said.

Sales of drug-coated heart stents made by J&J and Boston Scientific Corp. fell in March, declining for the sixth time in seven months as doctors use older, bare-metal models to prop open arteries, according to a report released last week by Goodroe Healthcare Solutions, a Norcross, Georgia, company that surveys U.S. hospitals.

Pharmaceutical revenue rose 11 percent to $6.2 billion. Sales of antipsychotics, including the schizophrenia drug Risperdal, rose 13 percent to $1.2 billion. Sales of Procrit, an anemia drug re-labeled in March to warn of risks of heart attacks and strokes, rose 2 percent, to $817 million.

``It was a positive surprise that Procrit issues haven't shown up in the numbers,'' Cranna said.

Procrit Sales

Procrit sales were bolstered by strong revenue from retailers and hospitals during the quarter, J&J said.

Consumer-product revenue rose 49 percent to $3.5 billion, helped by sales from products acquired from Pfizer as well as from J&J's line of baby-care items.

In the first quarter of 2006, earnings excluding a breakup fee from J&J's failed effort to buy Guidant Corp. were $3 billion, or 99 cents a share.

Also today, J&J's Centocor unit and New York University sued Abbott Laboratories, demanding royalties on the company's top-selling product, the arthritis drug Humira.

Centocor, which sells the competing Remicade arthritis medicine, and the university say Humira infringes on their patent covering antibodies against tumor necrosis factor, or TNF, which is linked to inflammation.

To contact the reporter on this story: Lisa Rapaport in New York at Lrapaport1@bloomberg.net

Last Updated: April 17, 2007 16:11 EDT