With the second quarter now past, number-crunchers are trying to anticipate the next round of pharma earnings. And for Johnson & Johnson ($JNJ), the word is that its fast-growing drugs will keep on delivering year-over-year growth--with one key exception.
According to Wells Fargo analysts, several J&J meds could beat expectations for Q2 sales. Among them are the SGLT2 diabetes treatments Invokana and Invokamet--which brought in $278 million in Q1--and the anticoagulant Xarelto, which has elbowed its way to the top of the warfarin-alternative market. Xarelto delivered $441 million in the first quarter, a 40% increase. Invega Sustenna, a long-acting antipsychotic, and the blockbuster anti-inflammatory med Remicade round out the bunch of pharma products expected to deliver in Q2.
As the first drugmaker to roll out earnings results every quarter, J&J is closely watched for hints at industrywide performance. The company posts its quarterly figures July 14.
Offsetting all the growing drugs would be the hepatitis C fighter Olysio, which churned out cash last year till new combo meds hit the scene. Olysio has always been expected to lose ground to cocktails from Gilead Sciences ($GILD) (Harvoni) and AbbVie ($ABBV) (Viekira Pak). Despite an FDA approval for use alongside Gilead's Sovaldi, that's likely to bear out when J&J rolls out its Q2 numbers, the Wells Fargo analysts said. For the first quarter, Olysio sales dropped by 34%.
Back on the positive side of the ledger, Nielsen data hints that J&J's consumer business in the U.S. is likely to at least hit expectations, if not surpass them, the Wells Fargo analysts said. That's after a long period of less-than-stellar results from that unit, which has struggled to get over-the-counter drug sales back on track, after a damaging round of recalls in 2009 and 2010.
J&J's growing meds face some threats going forward, however. The FDA recently warned about the risk of diabetic ketoacidosis in patients using SGLT2 meds, a class that includes Invokana. Bristol-Myers Squibb ($BMY) and Pfizer ($PFE) are fighting hard to grow Eliquis, their rival to J&J's Xarelto, and J&J and partner Bayer are fighting back with a campaign to highlight Xarelto's trial data.
- read the Barron's note
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