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Will J&J (JNJ) Pharma Unit Outperform Market & Drive Q1 Results?
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Johnson & Johnson (JNJ - Free Report) continues to work on strengthening its Pharma segment, which has been driving revenues over the past few quarters. In J&J’s Pharma segment, its oncology drug, Darzalex as well as psoriasis treatment, Stelara are likely to have driven sales growth in the first quarter due to increased penetration and new indications.
Regarding Stelara, we believe that strong market growth and share gains in Crohn's disease and ulcerative colitis in the United States are likely to have driven sales growth of Stelara. While J&J expects Stelara volumes to increase till the loss of exclusivity in late 2023, the growth might have been hurt by pricing pressure as well as potential increased austerity measures across Europe.
Our model estimates Darzalex and Stelara sales to be $2.14 billion and $2.42 billion, respectively, in the first quarter of 2023.
However, lower sales of its key medicine, Imbruvica, due to rise in competitive pressure in the United States from novel oral agents, are likely to have hurt the top line in the fourth quarter. Also, below pre-COVID levels in the CLL market are expected to have hurt sales in the United States.
Our model estimates Imbruvica sales to be $870.6 million.
In the past year, J&J’s shares have declined 6.7% against the industry’s 8.6% increase.
Image Source: Zacks Investment Research
Other core products like Invega Sustenna and new drugs, Erleada and Tremfya, might have also contributed significantly to sales growth. However, the loss of exclusivity of Invega Sustenna in Europe might have hurt the drug’s international sales. Sales of PAH drugs are also likely to have risen in the quarter.
Generic/biosimilar competition for drugs like Zytiga and Remicade is likely to have hurt the top line. Sales of J&J’s single-dose COVID-19 vaccine are likely to have declined year over year in the first quarter.
Overall, Pharmaceuticals unit sales slowed down in the fourth quarter of 2022 though it was an above-market performance. It remains to be seen if the sales trend improved in the first quarter of 2023. In the first half of the year, the loss of exclusivity of products like Zytiga and Invega Sustenna in Europe as well as continued pricing pressure is expected to put pressure on the Pharmaceutical segment’s top line. The ramp up of new products is expected to be stronger in the second half of the year.
Our model estimates J&J’s Pharmaceuticals unit revenues to be $12.62 billion.
Importantly, on the first-quarter earnings call, investors will be keen on knowing whether J&J provides an updated business outlook for 2023.
Some better-ranked drugmakers/biotech companies are Novo Nordisk (NVO - Free Report) Innoviva (INVA - Free Report) and Sanofi (SNY - Free Report) . While Novo Nordisk has a Zacks Rank of 1 (Strong Buy), Innoviva and Sanofi have a Zacks Rank #2 (Buy).
Estimates for Novo Nordisk’s 2023 earnings per share have increased from $4.20 to $4.52 over the past 60 days. Estimates for 2024 have jumped from $4.90 per share to $5.26 in the same timeframe. Novo Nordisk’s stock has surged 44.9% in the past year.
Novo Nordisk beat earnings expectations in three of the trailing four quarters. The company delivered a four-quarter earnings surprise of 3.00%, on average.
Estimates for Sanofi’s earnings per share have increased from $4.40 to $4.41 over in the past 60 days while that for 2024 have gone up from $4.86 per share to $4.89 per share. Sanofi’s stock has risen 1.8% in the past year.
Sanofi beat earnings expectations in three of the trailing four quarters. The company delivered a four-quarter earnings surprise of 7.68%, on average.
Estimates for Innoviva’s 2023 earnings per share have increased from $1.04 to $1.37. Estimates for 2024 have jumped from 52 cents per share to $1.25 in the past 60 days. Innoviva’s stock has declined 35.1% in the past year.
Innoviva missed earnings expectations in three of the trailing four quarters. The company delivered a four-quarter negative earnings surprise of 50.78%, on average.
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Will J&J (JNJ) Pharma Unit Outperform Market & Drive Q1 Results?
Johnson & Johnson (JNJ - Free Report) continues to work on strengthening its Pharma segment, which has been driving revenues over the past few quarters. In J&J’s Pharma segment, its oncology drug, Darzalex as well as psoriasis treatment, Stelara are likely to have driven sales growth in the first quarter due to increased penetration and new indications.
Regarding Stelara, we believe that strong market growth and share gains in Crohn's disease and ulcerative colitis in the United States are likely to have driven sales growth of Stelara. While J&J expects Stelara volumes to increase till the loss of exclusivity in late 2023, the growth might have been hurt by pricing pressure as well as potential increased austerity measures across Europe.
Our model estimates Darzalex and Stelara sales to be $2.14 billion and $2.42 billion, respectively, in the first quarter of 2023.
However, lower sales of its key medicine, Imbruvica, due to rise in competitive pressure in the United States from novel oral agents, are likely to have hurt the top line in the fourth quarter. Also, below pre-COVID levels in the CLL market are expected to have hurt sales in the United States.
Our model estimates Imbruvica sales to be $870.6 million.
In the past year, J&J’s shares have declined 6.7% against the industry’s 8.6% increase.
Image Source: Zacks Investment Research
Other core products like Invega Sustenna and new drugs, Erleada and Tremfya, might have also contributed significantly to sales growth. However, the loss of exclusivity of Invega Sustenna in Europe might have hurt the drug’s international sales. Sales of PAH drugs are also likely to have risen in the quarter.
Generic/biosimilar competition for drugs like Zytiga and Remicade is likely to have hurt the top line. Sales of J&J’s single-dose COVID-19 vaccine are likely to have declined year over year in the first quarter.
Overall, Pharmaceuticals unit sales slowed down in the fourth quarter of 2022 though it was an above-market performance. It remains to be seen if the sales trend improved in the first quarter of 2023. In the first half of the year, the loss of exclusivity of products like Zytiga and Invega Sustenna in Europe as well as continued pricing pressure is expected to put pressure on the Pharmaceutical segment’s top line. The ramp up of new products is expected to be stronger in the second half of the year.
Our model estimates J&J’s Pharmaceuticals unit revenues to be $12.62 billion.
Importantly, on the first-quarter earnings call, investors will be keen on knowing whether J&J provides an updated business outlook for 2023.
Zacks Rank and Stocks to Consider
J&J currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Johnson & Johnson Price, Consensus and EPS Surprise
Johnson & Johnson price-consensus-eps-surprise-chart | Johnson & Johnson Quote
Some better-ranked drugmakers/biotech companies are Novo Nordisk (NVO - Free Report) Innoviva (INVA - Free Report) and Sanofi (SNY - Free Report) . While Novo Nordisk has a Zacks Rank of 1 (Strong Buy), Innoviva and Sanofi have a Zacks Rank #2 (Buy).
Estimates for Novo Nordisk’s 2023 earnings per share have increased from $4.20 to $4.52 over the past 60 days. Estimates for 2024 have jumped from $4.90 per share to $5.26 in the same timeframe. Novo Nordisk’s stock has surged 44.9% in the past year.
Novo Nordisk beat earnings expectations in three of the trailing four quarters. The company delivered a four-quarter earnings surprise of 3.00%, on average.
Estimates for Sanofi’s earnings per share have increased from $4.40 to $4.41 over in the past 60 days while that for 2024 have gone up from $4.86 per share to $4.89 per share. Sanofi’s stock has risen 1.8% in the past year.
Sanofi beat earnings expectations in three of the trailing four quarters. The company delivered a four-quarter earnings surprise of 7.68%, on average.
Estimates for Innoviva’s 2023 earnings per share have increased from $1.04 to $1.37. Estimates for 2024 have jumped from 52 cents per share to $1.25 in the past 60 days. Innoviva’s stock has declined 35.1% in the past year.
Innoviva missed earnings expectations in three of the trailing four quarters. The company delivered a four-quarter negative earnings surprise of 50.78%, on average.