J&J reports strong second-quarter profits driven by pharmaceutical sales

Johnson & Johnson (J&J) beat second-quarter profit and revenue estimates on Wednesday, driven by strong sales of its drugs, including cancer drug Darzalex and blockbuster psoriasis drug Stelara. Sales of Stelara have long been a key driver of J&J’s revenue growth, with analysts forecasting sales of more than $10 billion this year.

However, this could fall to about $7 billion in 2025, when as many as six similar copies of the drug are expected to be launched in the US.

Johnson & Johnson Drug Sales

J&J Chief Financial Officer Joe Wolk said he expects to finalize the agreements in the next three months that will set Stelara’s U.S. underwriting target in 2025.

“Let me remind you that we continue to strive to grow our pharmaceutical business despite the competition from biosimilars that we plan to face next year,” he said.

J&J Quarterly Results

In Q2, Stelara sales rose 3.1% to $2.89 billion, topping analysts’ estimates of $2.77 billion, according to LSEG data. Blood cancer drug Darzalex sales rose 18.4% to $2.88 billion, topping LSEG’s estimates of $2.86 billion.

In a conference call with a J&J representative after the earnings call, Wolk said sales growth at the company’s pharmaceuticals division will be lower in the second half of this year as Stelara biosimilars hit the European market later this month.

Total revenue of $22.4 billion topped consensus estimates of $22.3 billion, according to LSEG data. Adjusted earnings of $2.82 per share beat analysts’ expectations of $2.70 per share.

New Jersey-based drugmaker J&J said it now expects total sales in 2024 to be between $89.2 billion and $89.6 billion, down from its previous forecast of $88.7 billion and $89.1 billion.

J&J behind stock forecast

J&J also lowered its full-year earnings per share forecast from $10.60 to $10.75 to a range of $10 to $10.10, which included a 68 cent decline for transaction-related costs, including the company’s $13 billion purchase of heart medical device company Shockwave.

It was one of several deals for J&J this year, including the May purchase of experimental skin disease drugs in two acquisitions valued at $2.1 billion.

J&J lawsuit

J&J investors are also awaiting a decision on lawsuits the company is facing over its talc-based products.

Johnson & Johnson’s lawsuits number in the tens of thousands, claiming its talc-based products cause cancer. Several plaintiffs face a July 26 vote on J&J’s third attempt at a bankruptcy maneuver for the subsidiary that would limit the drugmaker’s liability and establish a fund to compensate victims.

J&J’s Wolk said the company in recent weeks has received support for the settlement from three large law firms representing plaintiffs.

“Until we have some resolution on the talc issue and more certainty on the trajectory of the Stelara decline, the stock will have a hard time moving forward,” Harlow said.

J&J share price

Shares of J&J, the drug and medical device maker, rose nearly 3% to $155.4 in morning trading. J&J shares also lifted shares of other device makers, with Abbott, Stryker and Medtronic each rising about 3% on Wednesday.