Johnson & Johnson narrowly tops quarterly estimates as pharmaceutical, medtech sales jump

The inventory buying and selling graph of Johnson & Johnson is seen on a smartphone display screen.

Rafael Henrique | SOPA Images | LightRocket | Getty Images

Johnson & Johnson on Tuesday reported fourth-quarter earnings and income that narrowly edged out Wall Street’s expectations as sales within the firm’s pharmaceutical and medical devices companies surged.

J&J additionally supplied full-year guidance for 2024, forecasting sales of $87.8 billion to $88.6 billion and adjusted earnings of $10.55 to $10.75 per share. 

Here’s what J&J reported for the fourth quarter in contrast with what Wall Street was anticipating, primarily based on a survey of analysts by LSEG, previously identified as Refinitiv:

  • Earnings per share: $2.29 adjusted vs. $2.28 anticipated
  • Revenue: $21.40 billion vs. $21.01 billion anticipated

J&J, whose monetary outcomes are thought of a bellwether for the broader well being sector, booked $21.40 billion in whole sales for the ultimate three months of 2023, up 7.3% from the identical quarter in 2022. 

The pharmaceutical large reported internet revenue of $4.13 billion, or $1.70 per share in the course of the quarter. That compares with internet revenue of $3.23 billion, or $1.22 per share, for the year-ago interval. 

Excluding sure objects, adjusted earnings per share had been $2.29 for the fourth-quarter of 2023.

The outcomes come six months after J&J accomplished its spinoff of client well being unit Kenvue, the corporate’s largest shake-up in its practically 140-year historical past. J&J is now zeroing in on its pharmaceutical and medical gadgets divisions to drive development. 

Segment outcomes

J&J’s medical gadgets enterprise generated sales of $7.67 billion, up 13.3% from the fourth quarter of 2022. Wall Street was anticipating income of $7.50 billion, in line with StreetAccount.

J&J mentioned its acquisition of Abiomed, a cardiovascular medical know-how firm, in December fueled the year-over-year rise.

The firm mentioned development additionally got here from electrophysiological merchandise, which consider the center’s electrical system and assist medical doctors perceive the reason for irregular coronary heart rhythms.

Wound closure merchandise and gadgets for orthopedic trauma, or severe accidents of the skeletal or muscular system, contributed, together with contact lenses.

Meanwhile, J&J reported $13.72 billion in pharmaceutical sales, marking 4.2% 12 months over 12 months development. Excluding sales of its unpopular Covid vaccine, the pharmaceutical division raked in $13.68 billion. 

It was the third quarter with none U.S. sales from J&J’s Covid vaccine, which introduced in $44 million in worldwide income.

Wall Street was anticipating sales of $13.44 billion for the enterprise phase, in line with StreetAccount. The enterprise, additionally identified as “Innovative Medicine,” is concentrated on growing medicine throughout completely different illness areas.

J&J mentioned development within the division was pushed by sales of Darzalex, a biologic for the remedy of a number of myeloma, together with Erleada, a prostate most cancers remedy, and different oncology therapies. 

J&J’s blockbuster drug Stelara, which is used to deal with a number of continual and probably disabling circumstances such as Crohn’s disease, additionally contributed to development. J&J started to lose patent protections on Stelara late final 12 months, which opened up the door for cheaper biosimilar opponents to enter the market. But the corporate has purchased itself extra time: J&J has inked settlement agreements with Amgen and different drugmakers to delay the launch of some Stelara copycats to 2025. 

J&J mentioned development within the pharmaceutical phase was partially offset by a decline in sales of its prostate most cancers drug Zytiga and blood most cancers drug Imbruvica, which is co-marketed by AbbVie. Both Imbruvica and Stelara can be topic to the primary spherical of Medicare drug worth negotiations beneath the Inflation Reduction Act. 

Medicare negotiations

J&J will quickly start price talks with the federal Medicare program over Stelara as effectively as blood thinner Xarelto.

President Joe Biden‘s Inflation Reduction Act, which handed in 2022, empowered Medicare to barter down drug costs for the primary time in this system’s six-decade historical past. J&J signed an settlement to take part within the worth talks in October, even after it sued the Biden administration to halt the method in July.

The negotiated costs for the medicine will go into impact in 2026.

The fourth-quarter outcomes additionally come amid investor concern over the hundreds of lawsuits claiming that J&J’s talc-based merchandise had been contaminated with the carcinogenic asbestos and prompted ovarian most cancers and several other deaths.

Those merchandise, together with J&J’s namesake child powder, now fall beneath Kenvue. But J&J will assume all talc-related liabilities that come up within the U.S. and Canada.

In 2021, J&J offloaded its talc liabilities into a brand new subsidiary, LTL Management, which instantly filed for Chapter 11 chapter safety. But a federal chapter decide in July rejected J&J’s second try to resolve these lawsuits in chapter. J&J has mentioned LTL Management intends to enchantment the choice.

J&J will maintain a convention name with buyers at 8:30 a.m. ET.

This story is growing. Please examine again for updates.

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