Johnson And Johnson Continues To Focus On Medical Innovation

On Wednesday, Johnson & Johnson JNJ reported its second quarter results that reflected a strong momentum of its medtech and innovative medicine divisions. Although one-time charges prevented topline growth from reaching the bottom line, Johnson and Johnson showed it continues to advance its drug pipeline for a new medical era, with significant clinical milestones being attained throughout the quarter. 

Second Quarter Highlights

For the June quarter, Johnson & Johnson reported topline growth of 4.3% YoY as sales grew to $22.45 billion, surpassing the FactSet consensus of $22.33 billion. Regionally, U.S. sales grew 7.8% YoY, bringing in $12.5 billion, while international sales remained flat at $9.8 billion. 

Fueled by cancer drug Darzalex among other growth drivers, the innovative medicine segment recorded sales growth of 5.5%, bringing in revenue of $14.49 billion, also topping FactSet consensus of $14.12 billion.

The medtech division grew 2.2% to $7.96 billion, coming short of Fact Set’s consensus of $8.17 billion

As for Johnson & Johnson’s best-selling drugs, psoriasis treatment Stelara recorded growth of 3.1% to $2.89 billion, surpassing FactSet consensus of $2.85 billion, while cancer treatment Darzalex recorded 18.4% growth with sales rising to to $2.878 billion, also slighly below the expected $2.885 billion.

On the other hand, infectious disease drugs recorded a 13.9% drop with sales amounting to $965 million, while COVID-19 vaccine sales plummeted even more, falling 40% to $172 million.

Due to one-time charges, net earnings fell almost 13% to $4.6 billion, with earnings per share dropping nearly 6% to $1.93. But adjusted for one-time items, EPS actually rose by 10.2% to $2.82.

Slightly altered full year guidance

J&J raised the midpoint of its full-year guidance for operational sales from a $88.9 billion to $89.4 billion, fueled by the completion of the $13.1 billion acquisition of its newest medtech conquest, Shockwave Medical.  But, due to the costs of this strategic acquisitions, it also lowered its full-year adjusted operational EPS guidance that are now expected in a range from $10 to $10.10.

The second quarter performance reflects focus on medical innovation.

Throughout the quarter, the health care bellwether was busy with M&A. Besides completing the Shockwave deal, it scooped up bispecific antibodies biotech Proteologix for $850 million in cash. Johnson and Johnson also spent $1.25 billion to  get Numab Therapeutics’ experimental bispecific antibody that targets atopic dermatitis.  In addition, J& J also had a few activities of the regulatory front during the quarter. Carvykti was greenlit by the Food and Drug Administration for second-line use in adults with relapsed refractory multiple myeloma, which J&J developed with Legend Biotech’s. J&J also submitted an application to treat moderately to severely active Crohn’s disease with Tremfya.

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