J&J lifts annual guidance as Q2 prescription drug sales resist COVID-19 impact

Headline results for the second quarter:

  • Prescription drug sales: $10.8 billion, up 2.1%
  • Overall revenue: $18.3 billion (forecasts of $17.6 billion), down 10.8%
  • Profit: $3.6 billion, down 35.3%

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

What the company said:

"Our second-quarter results reflect the impact of COVID-19 and the enduring strength of our pharmaceutical business, where we saw continued growth even in this environment," remarked CEO Alex Gorsky. He noted that the company remains focused on advancing the development of a vaccine to help address the COVID-19 pandemic, with plans unveiled on Thursday for a Phase I study to begin next week.

Other quarterly results:

  • US pharmaceutical revenue: $6.1 billion, up 5.8%
  • International pharmaceutical revenue: $4.6 billion, down 2.4%
  • Immunology product sales: $3.5 billion, up 1.6%
    • Stelara: $1.7 billion, up 8.9%, with strong uptake in in Crohn's disease and ulcerative colitis
    • Remicade: $935 million, down 15.5%, with the decline attributed to increased discounts/rebates and biosimilar competition
    • Simponi/Simponi Aria: $546 million, down 3%
    • Tremfya: $342 million, up 45.4%, boosted by sales in psoriasis
  • Oncology product sales: $2.8 billion, up 3.5%
    • Imbruvica: $949 million, up 14.1%, due to increased patient uptake globally and higher market share mainly in first-line chronic lymphocytic leukaemia
    • Darzalex: $901 million, up 16.3%, with continued US growth and share gains, partially offset by a one-time pricing adjustment in the EU last year
    • Zytiga: $568 million, down 18.6%, hit by generic competition
  • Invega Sustenna/Xeplion/Invega Trinza/Trevicta: $879 million, up 7.5%, boosted by new patient starts and persistency
  • Pulmonary hypertension products: $789 million, up 14.2%, with growth in Opsumit and Uptravi, countered by lower Tracleer sales as a result of generic competition
  • Xarelto: $559 million, up 1.7%, with total prescription growth and a one-time prior period pricing adjustment, partially offset by increased rebates
  • Prezista/Prezcobix/Rezolsta/Symtuza: $510 million, down 4.7%
  • Consumer health: $3.3 billion, down 7%, with over-the-counter drug sales driven primarily by COVID-19-related demand, mostly for pain

Looking ahead:

Johnson & Johnson now expects earnings per share this year of between $7.75 and $7.95, lifted from a prior range of $7.50 to $7.90. Meanwhile, full-year sales are predicted to be between $79.9 billion and $81.4 billion, boosted from an earlier forecast of $77.5 billion to $80.5 billion. Analysts are projecting $80.3 billion in sales for 2020.

The company explained that in its prescription drug unit, it has seen a "recent improvement in [the] number of patient interactions with health-care providers."

What analysts said:

Mizuho Securities analyst Vamil Divan remarked that "the company sees some encouraging trends overall, with many procedures approaching pre-COVID-19 levels and physician office visits and category growth trends in consumer improving from where they were earlier in the pandemic."

For related analysis, see ViewPoints: Johnson & Johnson greets COVID head-on.

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