A building at the Johnson & Johnson campus in Irvine, Calif., on Aug. 28, 2019.MARK RALSTON/AFP/Getty Images
Johnson & Johnson JNJ-N, fresh off a $14.6-billion deal to buy neurological drugmaker Intra-Cellular, reported fourth-quarter revenues and profit above Wall Street estimates on Wednesday, driven by strong sales of its cancer treatments.
J&J has been on an acquisition spree to boost its drugs and device businesses after spinning off its consumer unit in 2023. Last week, it announced the Intra-Cellular acquisition – its biggest deal in two years – to boost its portfolio of psychiatric drugs. It expects the deal to hit its annual earnings this year by 30 to 35 cents.
The New Jersey-based drugmaker expects 2025 sales of between $90.9-billion and $91.7-billion, and to earn between $10.75 and $10.95 per share, excluding the impact of the Intra-Cellular deal and a 25 cents per share hit from foreign currency.
Analysts were expecting sales of $90.98-billion and a profit of $10.56 per share for 2025, according to data compiled by LSEG.
However, investors said the 25 cent hit from a stronger dollar was above expectations, sending shares of the company down 1.5 per cent to $145.96 in premarket hours.
The currency impact was a “negative surprise” in an otherwise routine quarterly report, said Jeff Jonas, portfolio manager at Gabelli Funds, which owns about 193,000 J&J shares.
For the full year 2024, international revenues of $38.52-billion made up about 43.4 per cent of J&J’s total sales.
Quarterly sales of J&J’s cancer drugs rose 19 per cent worldwide, driven by more than $3-billion for multiple myeloma treatment Darzalex, which was up 20.9 per cent from a year ago.
“Darzalex continues to be a pillar brand with respect to performance,” said J&J Chief Financial Officer Joe Wolk in an interview, noting that sales from Shockwave Medical also helped drive growth.
Last year, J&J bought heart device maker Shockwave Medical for $13.1-billion. Shockwave generated $258-million in sales for the quarter and $564-million for the year, according to J&J.
J&J’s innovative medicine unit brought in fourth-quarter sales of $14.33-billion while its medtech unit generated $8.19-billion, up 4.4 per cent and 6.7 per cent respectively compared to a year ago.
Sales of J&J’s blockbuster psoriasis treatment Stelara fell 14.7 per cent to $2.35-billion in the fourth quarter. Analysts were expecting sales of $2.25-billion, according to LSEG data.
Close copies of Stelara launched in Europe, Canada and a few other markets last year. Several Stelara biosimilars are expected to launch in the U.S. this year.
The drug and device maker expects operational sales at a compounded annual rate of 5 per cent-7 per cent between 2025 and 2030.
“I think investors are perhaps a bit skeptical of those targets,” said James Harlow, vice president of Novare Capital Management, which owns 121,000 shares of the company.
For the full year, Stelara brought in revenue of $10.36-billion, making up more than 18 per cent of J&J’s total drug sales of $56.96-billion for 2024 and missing estimates of $10.59-billion.
Annual sales of the drug are expected to fall to about $7-billion this year.
Darzalex brought in annual sales of $11.67-billion, making it J&J’s biggest-selling drug. Analysts were expecting sales of $11.11-billion for this year.
J&J’s fourth-quarter sales stood at $22.52-billion, up 5.3 per cent from a year ago and above analysts’ expectations of $22.42-billion, according to LSEG data.
On an adjusted basis, the company earned $2.04 per share in the quarter – which includes a 22 cents charge related to its acquisition of medical device-maker V-Wave – nearly 11 per cent lower than the previous year but above analysts’ estimates of $2.01 per share.