Johnson & Johnson (JNJ) beat estimates for second-quarter profit and revenue on Wednesday, driven by strong sales of its drugs, including cancer treatment Darzalex and blockbuster psoriasis drug Stelara. Stelara has long been a key driver of revenue growth for J&J, with analysts forecasting sales of over $10 billion this year. But this could fall to about $7 billion in 2025 when as many as six close copies of the drug are due to launch in the U.S. Shares of the drug and medical device maker were up nearly 3% at $155.4 in morning trading.
In the second quarter, Stelara sales rose 3.1% to $2.89 billion, topping analysts' estimate of $2.77 billion according to LSEG data. Sales of blood cancer drug Darzalex rose 18.4% to $2.88 billion, edging past LSEG estimates of $2.86 billion. J&J Chief Financial Officer Joe Wolk said he expected to finalize contracts within the next three months that would determine favorable U.S. insurance coverage for Stelara in 2025. "I'll remind you that we are still calling for growth in our pharmaceutical business despite the biosimilar competition that we intend to encounter next year," he said.
Market Overview:- J&J beats profit and revenue estimates on strong drug sales.
- Stelara and Darzalex drive revenue growth.
- Shares up nearly 3% in morning trading.
- Stelara sales rose 3.1% to $2.89 billion.
- Darzalex sales increased by 18.4% to $2.88 billion.
- J&J expects to secure favorable U.S. insurance coverage for Stelara by 2025.
- Anticipation of Stelara biosimilars entering the U.S. market in 2025.
- J&J's pharmaceutical business expected to grow despite competition.
- Ongoing resolution of talc-related lawsuits impacting stock performance.
Total revenue of $22.4 billion surpassed the consensus estimate of $22.3 billion, according to LSEG data. Adjusted earnings of $2.82 per share beat analysts' expectations of $2.70 per share. The New Jersey-based drugmaker said it now expected total 2024 sales of $89.2 billion to $89.6 billion, compared with its prior forecast of $88.7 billion to $89.1 billion. J&J also lowered its annual per-share forecast to a range of $10 to $10.10 from $10.60 to $10.75, which includes a 68-cent hit from costs related to deals including its $13 billion purchase of cardiac medical device company Shockwave.
J&J shares also lifted stocks of other device manufacturers, with Abbott (ABT), Stryker (SYK), and Medtronic (MDT) rising about 3% each on Wednesday. Sales for its medical technology business rose 2.2% to $7.96 billion from $7.79 billion a year earlier, but fell short of analysts' estimate of $8.17 billion as sales of its surgical devices declined from last year. J&J investors have also been waiting for a decision on lawsuits that the company has been facing related to its talc products. J&J still faces tens of thousands of lawsuits alleging that its talc-based products caused cancer. Several claimants face a July 26 deadline to vote on J&J’s third attempt of a bankruptcy maneuver for a subsidiary that would limit the drugmaker's liability and set up a fund to pay victims.
