J&J lifts full-year forecast on pharma strength, Tremfya surge

Johnson & Johnson posted stronger-than-expected second-quarter results and raised its full-year financial targets, as rapid growth in its pharmaceutical division masked weakness in its medical technology business.

The healthcare conglomerate reported quarterly sales of $25.31 billion, a 6.6% increase from a year ago and above the average analyst estimate of $25.05 billion. Adjusted earnings reached $2.90 per share, topping expectations of $2.85.

The core driver was the pharmaceutical unit, which generated $16.38 billion in sales against estimates of $16.1 billion. Investors have been closely watching this segment to see how the company manages the patent cliff for Stelara, a major revenue generator that recently lost exclusivity and saw its sales fall sharply.

The results suggest the transition is progressing smoothly. Tremfya, which treats psoriasis and inflammatory bowel disease, saw its sales jump 72.5% to $2 billion, easily clearing estimates of $1.74 billion. Meanwhile, cancer treatment Darzalex delivered $4.2 billion in revenue, roughly in line with expectations.

The medical technology unit lagged slightly, posting $8.93 billion in revenue. The shortfall was largely tied to Abiomed, the heart pump maker J&J acquired in 2022. Abiomed sales fell 2% year over year, a sharp deceleration from the 14% growth seen in the first quarter.

Chief Financial Officer Joseph Wolk attributed the drop to a UK study questioning the use of Impella pumps during certain high-risk coronary procedures. Wolk pushed back against concerns over the franchise, pointing to upcoming clinical data to refute the study's implications.

Buoyed by the pharmaceutical performance, J&J lifted its full-year sales forecast to a midpoint of $101.1 billion, up from $100.8 billion. It also raised its adjusted earnings per share guidance to a midpoint of $11.68, compared to the prior $11.55.