J&J's Innovative Medicine Business in Q2: Here's What to Watch
Johnson & Johnson JNJ, through its Innovative Medicine segment, commercializes multiple blockbuster therapies spanning a wide range of disease areas, such as neuroscience, cardiovascular and metabolic disorders, immunology, oncology, pulmonary hypertension (PH), and infectious diseases. The company is set to announce its second-quarter 2026 results on July 15, and investors will be closely watching the performance of the Innovative Medicine segment.
Below, we highlight some key factors that may have influenced the segment’s sales during the quarter.
J&J’s Innovative Medicine unit is showing a growth trend, despite the loss of exclusivity (LOE) of the blockbuster drug, Stelara. The segment has recorded four consecutive quarters of sales of more than $15 billion despite the Stelara LOE, a trend likely to have continued in the second quarter of 2026.
J&J expects growth in the second quarter to be driven by higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains.
Other products like Uptravi and Opsumit are likely to have witnessed continued growth.
New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato are also likely to have contributed to top-line growth. However, sales of Xarelto, Simponi/Simponi Aria and Remicade declined in the first quarter, a trend likely to have continued in the second quarter.
Also, generic/biosimilar competition for key drug, Stelara, and lower sales of Imbruvica are likely to have hurt top-line growth.
Several biosimilar versions of Stelara were launched in the United States in 2025. According to patent settlements and license agreements, Amgen AMGN, Teva Pharmaceutical Industries, Samsung Bioepis/Sandoz and some other companies launched Stelara biosimilars in 2025. Stelara’s LOE negatively impacted the Innovative Medicines segment’s growth by 9.2% in the first quarter. We expect the negative impact to be steeper in the second quarter of 2026.
Imbruvica sales are likely to have declined due to rising competitive pressure in the United States due to new oral competition.
Investors will look for initial sales numbers and commercialization plans of J&J’snewly launched oral pill for plaque psoriasis, Icotyde, which was approved by the FDA in March 2026.
Investors will also be keen to know how J&J’s other new drugs approved last year performed. These products are Inlexzoh, a first-of-its-kind drug-releasing system, for treating high-risk non-muscle invasive bladder cancer and Imaavy (nipocalimab) for treating generalized myasthenia gravis.
Inlexzo generated sales of slightly above $30 million in the first quarter. J&J received a permanent J-code for Inlexzo reimbursement in April, which should have boosted patient access and sales for the therapy in the second quarter. J&J did not separately disclose sales of Imaavy in the first quarter results. It remains to be seen if it does so in the second quarter.
J&J Key Competitors
Immunology and oncology are J&J’s key areas. Other large drugmakers with a strong presence in the oncology market include Novartis, AstraZeneca AZN, AbbVieABBV, Amgen, Merck, Bristol-Myers, Roche and Pfizer. In immunology, AbbVie, Amgen, Sanofi, AstraZeneca and Pfizer hold a strong position.
JNJ’s Price Performance, Valuation and Estimates
J&J’s shares have outperformed the industry so far this year. The stock has risen 24.1% in the past year compared with 14.5% appreciation of the industry.
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From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 21.02 forward earnings, higher than 19.02 for the industry. The stock is also trading above its five-year mean of 15.65.
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The Zacks Consensus Estimate for 2026 earnings has been stable at $11.57 per share over the past 60 days, while that for 2027 earnings has gone up from $12.58 per share to $12.60 over the same time frame.
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J&J has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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