A building at the Johnson & Johnson campus in Irvine, Calif., on Aug. 28, 2019.MARK RALSTON/AFP/Getty Images
Johnson & Johnson JNJ-N raised its 2024 profit and sales forecasts on Tuesday after reporting strong sales of oncology drugs and quarterly results that beat Wall Street expectations.
Sales of J&J’s cancer drugs rose nearly 19 per cent worldwide for the quarter, driven by more than $3-billion for multiple myeloma treatment Darzalex, up 20.7 per cent or more than $500-million from a year ago.
Analysts, who expect Darzalex to bring in revenue of about $11-billion this year, had forecast sales of $2.92-billion for the third quarter.
J&J Chief Financial Officer Joe Wolk said continued adoption of the subcutaneous version of Darzalex, which significantly reduces treatment time, and regulatory approval for additional uses helped drive sales.
J&J said the aftermath of Hurricane Helene impacted business in the last few weeks of the quarter, mostly in areas hit by the storm such as western North Carolina and Florida. The company said it was closely monitoring shortages of IV fluid.
Flooding from Helene caused an outage at Baxter International’s Marion, North Carolina plant, and has limited the nation’s supply of intravenous fluids.
“The recently announced IV saline shortages … if they do persist, could potentially impact surgical procedures across our portfolio,” said Tim Schmid, J&J’s worldwide chairman for the medical devices business.
The New Jersey-based health care conglomerate boosted its profit forecast for the year at the midpoint by 10 cents to $10.15 per share, excluding a 24-cent charge related to its purchase of medical device maker V-Wave.
The company also said it expected to post sales of between $89.4-billion and $89.8-billion for the year, up from its prior forecast of $89.2-billion to $89.6-billion.
However, it now expects to earn between $9.86 and $9.96 per share for the year, including charges related to mergers and acquisitions. The company previously forecast a profit of $10 to $10.10 per share for 2024.
J&J shares were up nearly 3 per cent at $166.14 on a down day for the broader market.
Sales of blockbuster psoriasis drug Stelara fell 6.6 per cent to $2.68-billion in the third quarter, but beat analyst estimates of $2.43-billion.
Stelara has long been a key growth driver for J&J, with analysts forecasting sales of over $10-billion this year. Sales are expected to fall to about $7-billion in 2025, when it could face competition from as many as six biosimilar versions in the U.S.
J&J said it was confident it can deliver 2025 pharmaceutical sales “above its $57-billion target” despite Stelara’s loss of exclusivity. Analysts expect drug sales of $56.77-billion next year.
Barclays analyst Matt Miksic said the target seems reasonable, given the strong performance of the pharmaceuticals unit this quarter.
Stelara began facing competition from biosimilar rivals earlier this year in Canada, the European Economic Area and Japan.
The company’s cancer cell therapy, Carvykti, brought in sales of $286-million, beating estimates of $239-million. Tight supply has limited Carvykti sales, but J&J said it was working to boost production capacity at plants in New Jersey and Belgium.
Quarterly sales for J&J’s medical devices unit rose 5.8 per cent to $7.9-billion, short of analysts’ expectations of $8.05-billion.
Wolk told Reuters J&J had hoped for “something better” in its medical technology performance this quarter but faced headwinds in the Asia Pacific region, including in China and Japan.
On a conference call, the CFO said the company expects no “material improvement” for its devices unit in China this year.
J&J reported adjusted earnings of $2.42 per share for the third quarter, down 9 per cent from a year ago but above analysts’ average estimates of $2.21, according to LSEG data.
The company’s quarterly sales were $22.5-billion, topping analysts’ expectations of $22.16-billion.