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J&J Innovative Medicine Unit Shines Again in Q2: Will This Continue?
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Key Takeaways
JNJ's Innovative Medicine segment grew 4.9% in Q2, reaching $15.2B in sales despite Stelara headwinds.
Growth was driven by Darzalex, Tremfya, Erleada and new drugs like Carvykti, Tecvayli and Talvey.
JNJ expects stronger second-half growth and projects over $57B in Innovative Medicines sales for 2025.
Johnson & Johnson’s (JNJ - Free Report) Innovative Medicine segment markets several multi-million-dollar drugs that cover a broad range of areas, including neuroscience, cardiovascular and metabolism, immunology, oncology, pulmonary hypertension and infectious diseases.
J&J’s Innovative Medicine business continued its solid growth in the second quarter of 2025 with sales rising 4.9% year over year to $15.2 billion. On an organic basis, sales rose 2.4% despite the loss of exclusivity (“LOE”) of J&J’s multi-billion-dollar product, Stelara, and the negative impact of the Part D redesign.
Higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains drove the segment’s growth. Xarelto and Simponi/Simponi Aria sales also rose in the quarter. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato contributed significantly to growth.The sales growth was partially dampened by lower sales of Imbruvica and generic/biosimilar competition to drugs like Stelara and Zytiga. Stelara LOE negatively impacted Innovative Medicine segment growth by 1170 basis points.
While sales of blockbuster multiple myeloma treatment, Darzalex, rose 23.0% year over year to $3.54 billion, Stelara sales declined 42.7% to $1.65 billion.
Several biosimilar versions of Stelara have been launched in the United States in 2025. According to patent settlements and license agreements, Amgen (AMGN - Free Report) , Teva, Samsung Bioepis/Sandoz and some other companies have already launched Stelara biosimilars this year. Stelara biosimilar competition is expected to accelerate throughout 2025 as the number of biosimilar entrants increases.
Erleada generated sales of $908.0 million in the quarter, up 23.4%, while Tremfya recorded sales of $1.19 billion in the quarter, up 31.0% year over year.
J&J expects operational sales growth in the Innovative Medicine segment to be higher in the second half than in the first. Growth is likely to be driven by its key products such as Darzalex, Tremfya, Spravato and Erleada, as well as new drugs like Carvykti, Tecvayli and Talvey and new indications for Tremfya and Rybrevant. J&J expects to generate more than $57 billion in sales in the Innovative Medicine segment in 2025.
Moreover, J&J believes 10 of its new Innovative Medicine products have the potential to deliver peak sales of $5 billion, including new cancer drugs like Talvey and Tecvayli, newly acquired drug, Caplyta and pipeline candidates like nipocalimab, TAR-200 and icotrokinra (JNJ-2113).
Nipocalimab was approved under the name Imaavy in April for treating generalized myasthenia gravis. TAR-200 is under priority review with the FDA for treating non-muscle invasive bladder cancer and is expected to be approved this year. Caplyta was added with the Apil acquisition of Intra-Cellular Therapies. As regards icotrokinra, a new drug application, seeking approval of the oral candidate for treating moderate-to-severe plaque psoriasis, has been filed with the FDA.
J&J Key Competitors
Immunology and oncology are J&J’s key areas. Other large drugmakers with a strong presence in the oncology market include Novartis, AstraZeneca (AZN - Free Report) , AbbVie (ABBV - Free Report) , Merck, Bristol-Myers, Roche and Pfizer. In immunology, AbbVie, Amgen, Sanofi, AstraZeneca and Pfizer hold a strong position.
JNJ’s Price Performance, Valuation and Estimates
J&J’s shares have outperformed the industry year to date. The stock has risen 18.9% in the year-to-date period compared with a 0.9% increase of the industry.
Image Source: Zacks Investment Research
From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 15.22 forward earnings, slightly higher than 14.91 for the industry. The stock is, however, trading below its five-year mean of 15.69.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2025 earnings has risen from $10.64 per share to $10.83 over the past seven days, while that for 2026 has risen from $11.09 to $11.33 over the same timeframe.
Image: Bigstock
J&J Innovative Medicine Unit Shines Again in Q2: Will This Continue?
Key Takeaways
Johnson & Johnson’s (JNJ - Free Report) Innovative Medicine segment markets several multi-million-dollar drugs that cover a broad range of areas, including neuroscience, cardiovascular and metabolism, immunology, oncology, pulmonary hypertension and infectious diseases.
J&J’s Innovative Medicine business continued its solid growth in the second quarter of 2025 with sales rising 4.9% year over year to $15.2 billion. On an organic basis, sales rose 2.4% despite the loss of exclusivity (“LOE”) of J&J’s multi-billion-dollar product, Stelara, and the negative impact of the Part D redesign.
Higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains drove the segment’s growth. Xarelto and Simponi/Simponi Aria sales also rose in the quarter. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato contributed significantly to growth.The sales growth was partially dampened by lower sales of Imbruvica and generic/biosimilar competition to drugs like Stelara and Zytiga. Stelara LOE negatively impacted Innovative Medicine segment growth by 1170 basis points.
While sales of blockbuster multiple myeloma treatment, Darzalex, rose 23.0% year over year to $3.54 billion, Stelara sales declined 42.7% to $1.65 billion.
Several biosimilar versions of Stelara have been launched in the United States in 2025. According to patent settlements and license agreements, Amgen (AMGN - Free Report) , Teva, Samsung Bioepis/Sandoz and some other companies have already launched Stelara biosimilars this year. Stelara biosimilar competition is expected to accelerate throughout 2025 as the number of biosimilar entrants increases.
Erleada generated sales of $908.0 million in the quarter, up 23.4%, while Tremfya recorded sales of $1.19 billion in the quarter, up 31.0% year over year.
J&J expects operational sales growth in the Innovative Medicine segment to be higher in the second half than in the first. Growth is likely to be driven by its key products such as Darzalex, Tremfya, Spravato and Erleada, as well as new drugs like Carvykti, Tecvayli and Talvey and new indications for Tremfya and Rybrevant. J&J expects to generate more than $57 billion in sales in the Innovative Medicine segment in 2025.
Moreover, J&J believes 10 of its new Innovative Medicine products have the potential to deliver peak sales of $5 billion, including new cancer drugs like Talvey and Tecvayli, newly acquired drug, Caplyta and pipeline candidates like nipocalimab, TAR-200 and icotrokinra (JNJ-2113).
Nipocalimab was approved under the name Imaavy in April for treating generalized myasthenia gravis. TAR-200 is under priority review with the FDA for treating non-muscle invasive bladder cancer and is expected to be approved this year. Caplyta was added with the Apil acquisition of Intra-Cellular Therapies. As regards icotrokinra, a new drug application, seeking approval of the oral candidate for treating moderate-to-severe plaque psoriasis, has been filed with the FDA.
J&J Key Competitors
Immunology and oncology are J&J’s key areas. Other large drugmakers with a strong presence in the oncology market include Novartis, AstraZeneca (AZN - Free Report) , AbbVie (ABBV - Free Report) , Merck, Bristol-Myers, Roche and Pfizer. In immunology, AbbVie, Amgen, Sanofi, AstraZeneca and Pfizer hold a strong position.
JNJ’s Price Performance, Valuation and Estimates
J&J’s shares have outperformed the industry year to date. The stock has risen 18.9% in the year-to-date period compared with a 0.9% increase of the industry.
From a valuation standpoint, J&J is slightly expensive. Going by the price/earnings ratio, the company’s shares currently trade at 15.22 forward earnings, slightly higher than 14.91 for the industry. The stock is, however, trading below its five-year mean of 15.69.
The Zacks Consensus Estimate for 2025 earnings has risen from $10.64 per share to $10.83 over the past seven days, while that for 2026 has risen from $11.09 to $11.33 over the same timeframe.
J&J has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.