J&J’s first-quarter profit beats estimates even as Stelara sales disappoint

The Johnson & Johnson logo is seen at an office building in Singapore

Johnson & Johnson beat first-quarter earnings expectations on Tuesday and raised its full-year forecast, as strong demand for cancer drug Darzalex and psoriasis treatment Tremfya more than offset a steep falloff in sales of its blockbuster autoimmune drug Stelara.

First-quarter revenue rose nearly 10 per cent from a year earlier to US$24.1 billion, surpassing analysts’ estimates of $23.6 billion, according to LSEG data. Adjusted earnings came in at $2.70 per share, above the consensus estimate of $2.66.

Shares, which have risen 15 per cent so far this year, were marginally down in volatile premarket trading.

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Despite the lukewarm market reaction, analysts viewed the results favorably.

“JNJ has emerged as one of the cleaner names in the group as the company moves beyond the Stelara loss of exclusivity and with healthy growth in its core portfolio,” J.P.Morgan analysts said. “We see JNJ as capable of generating sustained top-tier growth.”

Stelara, which topped $10 billion in annual sales at its peak, is facing biosimilar competition after losing patent protection last year. Sales of the drug fell around 60% from a year ago to $656 million.

Chief Financial Officer Joseph Wolk said in an interview that instead of switching to the biosimilars, many patients have chosen other treatments like Tremfya.

“We are seeing increased share in Tremfya and we anticipate we’ll see something similar in the new oral offering,” Wolk said, referring to its new drug Icotyde, which was approved in March.

The company expects newer products to have a greater impact as the year progresses.

Tremfya, which treats psoriasis as well as inflammatory bowel diseases, generated $1.6 billion in quarterly sales, beating estimates of $1.2 billion.

Sales of Darzalex, a blood cancer therapy launched in 2015, were $4 billion for the quarter, easily beating analysts’ expectations of $3.4 billion.

Quarterly sales for the medical technology business rose 7.7 per cent to $8.6 billion, in line with analysts’ expectations.

J&J expects further rounds of China’s volume-based procurement (VBP) this year, with greater impact in the second half. China rolled out the bulk-buy program in 2018 in an attempt to negotiate lower prices from drug manufacturers.

The company raised its full-year 2026 revenue forecast range with a new midpoint of about $100.8 billion, just above Wall Street’s estimate of $100.6 billion. It also lifted its adjusted earnings outlook to $11.55 per share at the midpoint, about in line with current expectations.

Guggenheim analysts called the forecast raise “modest,” but said results set the stage for greater potential upside as the year progresses.

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J&J is among the group of top global drugmakers that have agreed to so-called most-favored-nation drug pricing deals with the Trump administration. The companies have said they will lower their U.S. drug prices to match those charged in other developed countries, in exchange for tariff relief.

The company expects the impact of the agreement to be evenly distributed throughout the year.

U.S. President Donald Trump has asked for Congress to codify the most-favored-nation deals through legislation, but Wolk said J&J believes that would be bad policy.

“We’re not a fan of codifying” MFN, he said. “It’s really kind of a back door to price controls and we’ve seen what happens in countries with price controls - patients have less access to the most important medicines and innovation goes down.”

(Reporting by Michael Erman in New Jersey; Additional reporting by Kamal Choudhury and Mrinalika Roy in Bengaluru; Editing by Bill Berkrot and Devika Syamnath)