Bolstered by immunology and oncology, J&J's pharma business holds up under COVID-19 pressure

With Johnson & Johnson being the first drugmaker to report earnings each quarter, market watchers have eagerly looked to the drugmaker's performance amid the pandemic to see how other biopharma players might fare. 

Turns out, if J&J's pharma trends hold true across the industry, it'll be good news.

In the second quarter, the company posted year-over-year growth in pharmaceuticals despite COVID-associated challenges, such as slower patient starts, lower use of physician-administered drugs and lingering effects from first-quarter stockpiling.

J&J posted pharma sales of $10.75 billion during the quarter, a 3.9% increase at constant currencies from the same period last year, driven by immunology blockbuster Stelara and cancer meds Darzalex, Imbruvica and Erleada. 

Outside of pharmaceuticals, J&J’s medical devices sales fell 32.5%—a victim of the ban on elective procedures in many places—and consumer healthcare slipped 3.4%.

The company’s performance brought “encouraging trends” for J&J and for other companies in the industry, Bernstein analyst Ronny Gal wrote in a note to clients. J&J’s immunology and cancer sales in the U.S. were “strong,” he wrote, and with those being the “largest two markets for biopharma, this is a positive read across for the industry.” 

Looking forward, even as COVID-19 surges in the U.S., J&J executives are confident the new wave of cases won’t harm its business as much as the initial wave did. For several reasons, the new surge “should not have the same level of global impact that's been experienced in the last four months,” CFO Joe Wolk told analysts on a conference call Thursday.

First, he explained, “testing is more readily available,” as the U.S. now conducts more than 700,000 tests per day. Plus, healthcare professionals have more medical equipment and treatment for COVID-19 continues to improve as providers learn more about the virus and the drugs they're using to fight it.  

“While one death is too many, with a rapidly declining death rate related to the virus, the healthcare system is much better positioned than when the virus first appeared,” Wolk told analysts. “Therefore, while we actively monitor the rising case rate, our premise is that procedures and doctor visits will be largely permissible in the second half of this year.” 

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Elsewhere in J&J’s portfolio, sales for anemia med Procrit fell 25% to $136 million under biosimilar pressure. Revenues for Remicade, an immunology blockbuster that has faced years of biosimilar competition, slipped 14% to $935 million. 

In total, immunology sales grew 3% at constant currencies versus last year's second quarter to $3.52 billion. Oncology sales increased 5.7% to $2.79 billion during the quarter. The company's cardiovascular, metabolism and other medications declined 5.8% to $1.18 billion.