Ahead of key Stelara patent cliff, J&J's pharma business churns out growth

For more than 2 years, Johnson & Johnson has been plotting its future as a two-sector company. In the wake of the company’s consumer healthcare spinoff last summer, the company’s fourth-quarter results offer plenty of signs of life from the new-look J&J.

After wrapping up 2023 with a total haul of $85.2 billion, the company is heading into 2024 with “multiple catalysts for growth,” CEO Joaquin Duato said on J&J’s fourth-quarter and full-year earnings conference call. 

Across J&J’s innovative medicines portfolio, the company's oncology and immunology medicines generated the lion’s share of sales in 2023’s fourth quarter, helping the unit achieve operational growth in the U.S. of 9.5% during the period. Worldwide, J&J’s pharma business reeled in $13.72 billion during the fourth quarter, a 4% increase from the same period in 2022.

On the immunology front, J&J’s antibody blockbuster Stelara grew its market share and demonstrated continued strength in inflammatory bowel disease (IBD), J&J said in an earnings presentation (PDF). The company’s plaque psoriasis and psoriatic arthritis med Tremfya, for its part, also enjoyed gains thanks in part to overall market growth.

Meanwhile, J&J's oncology group turned in another headlining performance in the fourth quarter. At the top of the pack was J&J’s multiple myeloma injection Darzalex, which the company said enjoyed a sales increase thanks to “strong share gains in all regions.” Darzalex's full-year sales haul came in at $9.74 billion, a 22% jump from 2022.

Elsewhere, J&J’s Legend-partnered CAR-T med Carvykti continued to come into its own, which the company credited on the med’s ongoing launch, plus gains from manufacturing capacity improvements.

The CAR-T manufacturing boost is worldwide, from J&J doubling its cell processing capacity at its Raritan, New Jersey, plant to “making progress” at its European cell facilities and contracting external capacity to scale up production, Duato said on the call. J&J is confident that the additional supply will lead to quarter-over-quarter sales growth for Carvykti throughout 2024.

J&J is also in the process of launching new multiple myeloma contenders Tecvayli and its younger sibling Talvey. While Carvykti often takes the spotlight in the company's multiple myeloma franchise, it’s “important to recognize” the market performance of the two new bispecific antibodies Tecvayli and Talvey, the chief said.

It wasn’t all smooth sailing in oncology, however, with J&J’s innovative medicines growth partially offset by the loss of exclusivity for Zytiga and broader competitive pressures on the leukemia and lymphoma drug Imbruvica.

Despite the current strength of J&J's innovative portfolio, the New Jersey-based pharma giant isn't shying away from potential deals in 2024 to beef up its pipeline.

The company is “very well positioned” to “continue to entertain” several types of deals, chief financial officer Joesph Wolk noted. In 2023, the company shelled out more than $3 billion in capital for smaller deals in the way of licenses or partnerships and inked more than 50 deals, Duarto noted. 

“Our appetite is still interested in moving into spaces that complement our existing portfolio, whether that be in the near or long term,” Wolk added. 

Looking ahead to the rest of 2024, Duato confirmed his company’s guidance from December but added that J&J is still “filling in some of the details.” The company expects to chart 5% to 6% operational growth this year, signaling a range between $88.2 billion and $89 billion.

Duato added that J&J expects to deliver its 13th year of above-market growth in innovative medicines, with the performance driven by a handful of medicines.

That said, innovative medicines growth is expected to be “slightly stronger” in the first half of the year, J&J’s CFO Wolk said. In the back half of 2024, J&J expects to face Stelara biosimilars in Europe.

“This headwind will be partially offset by continued uptake for our recently launched products,” Wolk added.

Next year, Stelara biosimilars will come to the U.S. Worldwide, Stelara pulled down $10.8 billion last year, making it J&J's top medicine by sales.