Johnson & Johnson says drugs sales up 4.1 percent in Q1, bolstered by Stelara, Imbruvica, Darzalex

Headline results for the first quarter:

Prescription drug sales

$10.2 billion (forecasts of $9.8 billion)

+4.1%

Overall revenue

$20 billion (forecasts of $19.6 billion)

+0.1%

Profit

$3.7 billion

-14.2%

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"Pharmaceutical worldwide operational sales, excluding the net impact of acquisitions and divestitures, grew 7.9 percent," Johnson & Johnson reported, driven by Stelara, Imbruvica and Darzalex, among others. The company said these results partially offset declines in Remicade revenue and US sales of Zytiga due to biosimilar and generic entrants.

Meanwhile, executive vice president of pharmaceuticals Jennifer Taubert indicated that roll-out of Spravato, which won US approval last month for treatment-resistant depression, is "off to a very, very strong start," with as many as 800 treatment centres now certified to administer the therapy.  

Other results:

  • US pharmaceutical revenue: $5.6 billion, up 4.3 percent
  • International pharmaceutical revenue: $4.7 billion, up 3.9 percent
  • Stelara: $1.4 billion, up 32.4 percent, roughly in line with expectations
  • Remicade: $1.1 billion, down 20.6 percent, in line with expectations
  • Invega Sustenna/Xeplion/Invega Trinza/Trevicta: $790 million, up 13.5 percent
  • Imbruvica: $784 million, up 33.5 percent
  • Zytiga: $679 million, down 19.6 percent, mainly due to generic competition
  • Pulmonary hypertension products (Opsumit, Tracleer and Uptravi): $656 million, up 12.1 percent
  • Darzalex: $629 million, up 45.5 percent
  • Xarelto: $542 million, down 6.3 percent
  • Prezista/Prezcobix/Rezolsta/Symtuza: $523 million, up 9.5 percent
  • Simponi/Simponi Aria: $524 million, up 1 percent
  • Invokana/Invokamet: $202 million, down 18.4 percent

Looking ahead:

Johnson & Johnson anticipates full-year earnings per share in the range of $8.53 to $8.63, narrowed from a previous forecast of $8.50 to $8.65. Meanwhile, revenue is expected to rise between 2.5 percent and 3.5 percent, compared with an earlier growth range of 2 percent to 3 percent.

Analysts expect the company to generate full-year earnings of $8.58 per share on about $81.2 billion in sales.

What analysts said:

Cowen analyst Joshua Jennings stated Johnson & Johnson's "first-quarter results reflect another stellar quarter in pharma despite significant generic/biosimilar headwinds."

Meanwhile, analyst Brandon Henry of RBC Capital Markets noted that the company's "growth brands, with the exception of Xarelto, are sustaining momentum, and Remicade erosion is consistent with trend." He also said the annual sales outlook remains unchanged because of further appreciation of the US dollar versus the euro, adding "based on the strong start to 2019, we believe [Johnson & Johnson's] updated guidance is conservative."

Pipeline update:

Earlier this week, Johnson & Johnson announced that Invokana significantly lowered the risk of renal failure in patients with type 2 diabetes and chronic kidney disease. The therapy was submitted to the FDA for approval last month for reducing the risk of end-stage kidney disease and renal or cardiovascular death in this patient population.

For related analysis, see Key takeaways from Johnson & Johnson's Q1 earnings and investor call.

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