Johnson & Johnson raised its 2023 revenue outlook as some older drugs beat sales estimates, including its bestseller Stelara that’s expected to face generic competition in early 2025.
(Bloomberg) — Johnson & Johnson raised its 2023 revenue outlook as some older drugs beat sales estimates, including its bestseller Stelara that’s expected to face generic competition in early 2025.
Drugs approved in the previous decade like Tremfya, for severe plaque psoriasis, and Simponi, for rheumatoid arthritis, outpaced expectations, while the company squeezes the last life out of Stelara. J&J’s medical technology business missed estimates after growing at a quicker pace earlier this year.
J&J split off its consumer unit in the third quarter, leaving just the pharma and medical technology businesses. Investors are looking to see how the drugmaker leverages that combination for growth and whether it can deliver strong sales with new pharmaceuticals.
Full-year operational sales will range from $84.4 billion to $84.8 billion, the company said Tuesday in a statement, up from an August forecast for $83.6 billion to $84.4 billion. Adjusted earnings will be $10.07 to $10.13 a share, J&J said, compared with the earlier outlook of $10 to $10.10 a share.
Given the positive quarterly results, the new guidance “appears cautious” and may leave room for a further increase, Bloomberg Intelligence analyst John Murphy said in a research note. There’s still a possibility operational costs are set to rise more than expected in the fourth quarter, he said.
The shares fell less than 1% at 12:42 p.m. in New York trading. They had lost 11% this year through Monday’s close.
Sales in the pharmaceutical unit, the New Brunswick, NJ-based company’s largest, reached $13.9 billion, beating the average estimate of $13.5 billion. The company’s medical devices sold $7.5 billion, lower than the $7.59 billion seen by Wall Street.
J&J is restructuring its orthopedics business to exit less profitable markets and product lines by the end of 2025, which will cost up to $800 million, company executives said on a conference call.
Stelara sold $2.86 billion, beating estimates of $2.58 billion. Tremfya brought in $891 million and Simponi earned $629 million. The company’s closely watched innovative CAR-T cancer therapy Carvykti also beat estimates at $152 million in revenue.
Strong pharmaceutical sales will continue, and the unit will grow in 2025, despite the anticipated generic competition to Stelara, Chief Financial Officer Joe Wolk said in an interview.
New GLP-1 weight-loss drugs could hurt bariatric procedures, Wolk said, yet may also put more people in a weight range that would make them candidates for surgeries such as knee and hip replacements. The slight underperformance in medical technology was partly due to sanctions that hurt business in Russia, Wolk said.
Wall Street is watching for J&J’s next move in its attempt to settle tens of thousands of talc claims after a bankruptcy court denied the company’s $8.9 billion settlement offer. Wolk told Bloomberg the company will appeal and may take the case to the US Supreme Court. While it fights the suits, the company wants to find a solution with the plaintiffs, he said.
The drugmaker may seek regulatory approval in 2025 for a new lung cancer treatment combination that could compete against AstraZeneca’s best selling drug. Full results of a comparative study of the two therapies are expected at a European conference next week.
(Adds orthopedics restructuring in 8th paragraph, and lung cancer drug in last paragraph. An earlier version of this story corrected Stelara’s expected generic competition in first and eighth paragraphs.)
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