Johnson & Johnson (J&J) reported second-quarter results that topped analyst estimates and raised its full-year sales and profit guidance, as strong growth from its psoriasis drug Tremfya helped counterbalance weakness in other parts of the business.
The US health-care giant posted quarterly sales of $25.31 billion and adjusted earnings of $2.90 per share, both ahead of Wall Street expectations, according to data from LSEG cited by Reuters. Management now expects full-year sales of around $101.1 billion at the midpoint and adjusted earnings of $11.68 per share, up from previous forecasts.
Tremfya Leads the Way
The standout performer was Tremfya, a treatment for plaque psoriasis and psoriatic arthritis. Sales of the drug jumped 72.5% to $2.0 billion in the quarter, reflecting strong demand and expanded use in new patient populations. Tremfya is now one of J&J's top-selling drugs and is helping to fill the gap left by older products whose sales are declining.
Another key drug, Darzalex, used to treat multiple myeloma, also posted steady sales, though the company did not break out its exact figure in the brief. Together, these two drugs are providing a solid foundation for J&J's pharmaceutical segment.
Headwinds from Stelara and Abiomed
Not all parts of the portfolio are firing on all cylinders. Stelara, another blockbuster drug used for psoriasis and Crohn's disease, saw its revenue weaken as it faces competition from newer biosimilars and generic alternatives. Stelara has been a major revenue driver for J&J for years, but its patent protection is eroding, and sales are expected to continue declining.
Meanwhile, Abiomed, which makes heart pumps used in cardiac procedures, reported slower sales growth. J&J acquired Abiomed in 2022 for roughly $16.6 billion, betting on the growing market for mechanical circulatory support. However, the division has faced headwinds from supply chain issues and slower hospital adoption, though the company remains optimistic about its long-term potential.
What It Means for Investors
For everyday investors, J&J's raised guidance is a positive signal that the company's core drug portfolio remains strong enough to offset weaker areas. The surge in Tremfya sales shows that J&J is successfully transitioning its revenue base from older drugs like Stelara to newer ones, which is critical for long-term growth.
However, investors should keep an eye on the pace of Stelara's decline and whether Abiomed can regain momentum. J&J is also navigating legal challenges related to talc-based products, though those were not mentioned in this quarter's results. The company's diversified business—spanning pharmaceuticals, medical devices, and consumer health—provides some buffer, but drug patent cliffs remain a risk for all big pharma firms.
In the broader market context, J&J's results come as investors are watching for signs of strength in the health-care sector. Other companies like Richemont have also reported strong sales in their respective niches, but health-care tends to be more resilient during economic uncertainty. J&J's performance is a reminder that even in a mixed economy, well-positioned drug companies can deliver growth.
Looking ahead, analysts will be watching for updates on J&J's pipeline, including new drug approvals and any developments in its ongoing litigation. The company's ability to maintain its dividend—currently yielding around 3%—is also a key consideration for income-focused investors.
Overall, J&J's second-quarter report shows a company managing a transition well, with enough firepower from its newer drugs to keep the top line growing. For investors, it reinforces the case for holding diversified health-care names that can weather product cycles.
