J&J's sales, profit forecast for 2021 tops expectations

Headline results for the fourth quarter:

  • Prescription drug sales: $12.3 billion, up 16.3%
  • Overall revenue: $22.5 billion (forecasts of $21.7 billion), up 8.3%
  • Profit: $1.7 billion, down 56.7%

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

What the company said:

Johnson & Johnson noted that growth in prescription drug sales was led by the immunology therapy Stelara, as well as the oncology drugs Darzelex, Erleada and Imbruvica. Chief financial officer Joseph Wolk suggested that "this trend will continue," adding "we've got a couple of new launches in the oncology space that we feel really good about."

The company explained that profit in the fourth quarter was hit by litigation expenses of $2.9 billion, a sharp jump from $264 million in the same period of 2019.

Other quarterly results:

  • US pharmaceutical revenue: $7.1 billion, up 15.3%
  • International pharmaceutical revenue: $5.2 billion, up 17.7%
  • Immunology product sales: $4.1 billion, up 16.6%
    • Stelara: $2.2 billion, up 31.9%, with strong uptake in Crohn's disease and ulcerative colitis
    • Remicade: $901 million, down 12.9%, hit by increased discounts/rebates and biosimilar competition
    • Simponi/Simponi Aria: $576 million, up 12.1%
    • Tremfya: $382 million, up 41.5%, led by growth in psoriasis and uptake in psoriatic arthritis
  • Oncology product sales: $3.4 billion, up 26.4%
    • Darzalex: $1.3 billion, up 50.9%, with the increase driven by continued "strong market growth" and share gains in all regions, along with "solid uptake" of the subcutaneous formulation
    • Imbruvica: $1.1 billion, up 27.8%, boosted by market growth/leadership position in the US and increased patient uptake outside the US
    • Zytiga: $622 million, down 8.3%, due to generic competition
    • Erleada: $241 million, compared to $116 million in the year-ago period
  • Invega Sustenna/Xeplion/Invega Trinza/Trevicta: $965 million, up 10.8%
  • Pulmonary hypertension products: $865 million, up 39%, driven by "strong" sales of Opsumit and Uptravi
  • Xarelto: $629 million, up 3.1%, with higher demand partially offset by increased rebates
  • Prezista/Prezcobix/Rezolsta/Symtuza: $569 million, up 4.4%, with growth from "strong" sales of Symtuza in the US partially offset by increased competition for Prezista/Prezcobix/Rezolsta
  • Consumer health: $3.6 billion, up 1.4%
  • Full-year prescription drug sales: $45.6 billion, up 8%
  • Full-year sales: $82.6 billion, up 0.6%
  • Full-year profit: $14.7 billion, down 2.7%

Looking ahead:

Johnson & Johnson expects sales this year of between $90.5 billion and $91.7 billion, representing year-over-year growth in the range of 9.5% to 11%, while earnings per share are forecast to be between $9.40 and $9.60. Analysts estimate annual revenue of $88.6 billion, on earnings of $8.99 per share.

Wolk suggested that the company will likely adjust the guidance when it reports first-quarter financial results in April. "Our outlook is solid, just based on our core business, irrespective of the [COVID-19] vaccine," Wolk said, adding "our guidance doesn't include any distribution of vaccines at this point, and again, we're going to be offering it on a not-for-profit basis, so you're not gonna get the same type of margins on any sales of it."

Pipeline updates:

Johnson & Johnson previously indicated that interim findings from a Phase III study of its COVID-19 vaccine candidate Ad26.COV2.S might be available by the end of January, with Wolk saying Tuesday that results would be disclosed by early next week. "We're very confident and on track to meet all of our commitments, which would include 100 million doses to the US by the end of June," he added.

Meanwhile, Wolk indicated that the late-stage data are expected to be "robust," although he cautioned that there might be differences for people tested in places such as South Africa where new variants of the coronavirus have emerged. The study is "going to be very inclusive in terms of having certain ethnicities [such as] Blacks, Hispanics and the elderly," Wolk remarked, adding "because it's so diverse because of the geographic representation that could provide a lot of insights."

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