Johnson & Johnson (J&J) beat earnings estimates for Q2 profit and revenue on Wednesday, driven by strong sales of its drugs, including cancer treatment Darzalex and blockbuster psoriasis drug Stelara. Sale of drug 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.
Johnson & Johnson drug sales
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.
J&J quarterly earnings results
In the Q2, 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.
Wolk said on a J&J after earnings conference call that sales growth for the company’s pharmaceuticals business will be lower in the second half of this year as Stelara biosimilars enter the Europe market later this month.
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 J&J, 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 per share forecast
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.
That was among J&J’s several deals this year, including its May purchase of experimental skin disorder drugs in two acquisitions worth $2.1 billion.
J&J lawsuit
J&J investors have also been waiting for a decision on lawsuits that the company has been facing related to its talc products.
Johnson & Johnson lawsuits amount to tens of thousands 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.
J&J’s Wolk said the company in recent weeks had got endorsements for the settlement from three major law firms representing claimants.
“It’s going to be hard for the stock to get going until we get some kind of resolution on talc and a little bit more certainty on the contours of that (sales) erosion on Stelara,” said Harlow.
J&J share price
Share price of J&J, the drug and medical device maker were up nearly 3% at $155.4 in morning trading. J&J shares also lifted stocks of other device manufacturers, with Abbott, Stryker and Medtronic rising about 3% each on Wednesday.
