In the third quarter of 2023, Johnson & Johnson (J&J) exceeded analyst expectations, solidifying its position as a pharma and medical device-focused company. The successful quarter, combined with a forthcoming patent cliff in 2025, has spurred J&J to expand its market for new medicines.
During the quarter, J&J reported global sales of $21.35 billion, surpassing analysts’ forecasts of $21.04 billion. On the profit front, the company achieved earnings per share of $2.66, outperforming estimates of $2.52. Leading the way in sales was Stelara, a prominent immunology medication, which generated $2.86 billion during the quarter—a 17% increase compared to the same period in the previous year. However, as Stelara faces impending biosimilar competition in 2025, J&J is gearing up for the patent cliff.
To prepare for the transition, the company is actively launching new drugs, including CAR-T drug Carvykti, novel antidepressant Spravato, and cancer treatment Tecvayli. The latter is expected to reach the sales disclosure threshold next year.
Notably, J&J’s oncology division showcased strong performances. Darzalex reported $2.5 billion in sales for the quarter, with a 22% increase, driven by continued growth in various regions. The prostate cancer medication Erleada also had a standout quarter, with a 29% increase in sales, amounting to $1.74 billion in global sales for the year.
In contrast, sales for Imbruvica declined by 11% to $808 million, partially due to competition from the BeiGene cancer drug, Brukinsa.
J&J aims to expand sales in its pharmaceutical division to $57 billion by 2025, and CEO Joaquin Duato remains optimistic about further growth opportunities. Several upcoming readouts scheduled for 2024 are expected to contribute to this expansion.
Following the robust quarterly performance, J&J adjusted its annual operational sales guidance, increasing the midpoint by $600 million. The company anticipates operational sales for the year to fall between $84.4 billion and $84.8 billion. Additionally, the closure of J&J’s Kenvue share exchange offer in August resulted in a $21 billion “non-cash” gain during the third quarter.
J&J is actively exploring business development opportunities and holding regular discussions to evaluate potential deals. Chief Financial Officer Joe Wolk emphasized the company’s commitment to disciplined and strategic acquisitions that complement its existing portfolio, demonstrating openness to deals of varying sizes. The company remains on track to enhance its presence in the pharmaceutical and medical device sectors, building on its recent successes.
