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J&J's Innovative Medicine Unit Proves Its Resilience in Q2
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Key Takeaways
Johnson & Johnson's Innovative Medicine sales rose 6.8% operationally to $16.38 billion in Q2 2026.
JNJ's growth was led by Darzalex, Tremfya, Erleada and newer drugs despite Stelara's sharp decline.
Johnson & Johnson expects key drugs and new launches to support above-market growth through 2026.
Johnson & Johnson (JNJ - Free Report) , via its Innovative Medicine segment, markets a broad portfolio of blockbuster therapies across key areas, including neuroscience, cardiovascular and metabolic diseases, immunology, oncology, pulmonary hypertension and infectious diseases.
J&J’s Innovative Medicines/Pharma segment is the company’s primary growth engine, clearly outperforming its MedTech segment, despite the impact of biosimilar and generic competition on sales of some key drugs like Stelara, Remicade and Zytiga.
J&J’s Innovative Medicine Segment’s Q2 Performance
J&J’s Innovative Medicine segment delivered another quarter of healthy operational growth in the second quarter as sales rose 6.8% on an operational basis (excluding the impact of currency) to $16.38 billion.
On an organic basis, sales rose 6.9% despite the loss of exclusivity (“LOE”) of the multi-billion-dollar product, Stelara.
Higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains drove the segment’s growth. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato contributed significantly to growth. These gains were partly offset by lower sales of Stelara, Remicade, Imbruvica and Zytiga.
Sales of blockbuster multiple myeloma treatment, Darzalex, rose 18.9% to $4.21 billion in the quarter. Tremfya remained another key growth driver, with sales rising 72.5% to $2.05 billion. Erleada sales increased 9.5% to $995 million.
Stelara’s sales fell 55.2% to $740 million. Stelara’s LOE negatively impacted the Innovative Medicines segment’s growth by 760 basis points and total revenues by 460 basis points in the second quarter.
J&J’s Innovative Medicine Segment’s Outlook for H2
J&J expects its Innovative Medicine segment to remain a key growth driver in the second half of 2026. The growth is expected to be driven by its key products, such as Darzalex, Tremfya, Spravato, Carvykti and Erleada, as well as increased contribution from new launches like Icotyde, Rybrevant and Inlexzo, which can offset the ongoing impact of Stelara biosimilar competition. On the second-quarter conference call, J&J said that it is seeing strong launches of all these new drugs, Inlexzo, Icotyde and Imaavy.
However, other than the Stelara LOE impact, J&J expects generic impact for both Simponi and Opsumit to begin in 2026 as the drugs lose patent protection.
Overall, J&J expects continued above-market growth for the Innovative Medicine segment through the remainder of 2026. In fact, Innovative Medicine is expected to remain J&J's primary growth engine for the foreseeable future.
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) , Amgen (AMGN - 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 so far this year. The stock has risen 26.7% this year compared with 11.8% appreciation 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 21.07 forward earnings, higher than 18.72 for the industry. The stock is also trading above its five-year mean of 15.65.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for 2026 earnings has risen from $11.58 per share to $11.65 per share over the past 30 days, while that for 2027 earnings has gone up from $12.65 per share to $12.80 over the same time frame.
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Image: Bigstock
J&J's Innovative Medicine Unit Proves Its Resilience in Q2
Key Takeaways
Johnson & Johnson (JNJ - Free Report) , via its Innovative Medicine segment, markets a broad portfolio of blockbuster therapies across key areas, including neuroscience, cardiovascular and metabolic diseases, immunology, oncology, pulmonary hypertension and infectious diseases.
J&J’s Innovative Medicines/Pharma segment is the company’s primary growth engine, clearly outperforming its MedTech segment, despite the impact of biosimilar and generic competition on sales of some key drugs like Stelara, Remicade and Zytiga.
J&J’s Innovative Medicine Segment’s Q2 Performance
J&J’s Innovative Medicine segment delivered another quarter of healthy operational growth in the second quarter as sales rose 6.8% on an operational basis (excluding the impact of currency) to $16.38 billion.
On an organic basis, sales rose 6.9% despite the loss of exclusivity (“LOE”) of the multi-billion-dollar product, Stelara.
Higher sales of key products such as Darzalex, Tremfya and Erleada due to strong market growth and share gains drove the segment’s growth. New drugs like Carvykti, Tecvayli, Talvey, Rybrevant and Spravato contributed significantly to growth. These gains were partly offset by lower sales of Stelara, Remicade, Imbruvica and Zytiga.
Sales of blockbuster multiple myeloma treatment, Darzalex, rose 18.9% to $4.21 billion in the quarter. Tremfya remained another key growth driver, with sales rising 72.5% to $2.05 billion. Erleada sales increased 9.5% to $995 million.
Stelara’s sales fell 55.2% to $740 million. Stelara’s LOE negatively impacted the Innovative Medicines segment’s growth by 760 basis points and total revenues by 460 basis points in the second quarter.
J&J’s Innovative Medicine Segment’s Outlook for H2
J&J expects its Innovative Medicine segment to remain a key growth driver in the second half of 2026. The growth is expected to be driven by its key products, such as Darzalex, Tremfya, Spravato, Carvykti and Erleada, as well as increased contribution from new launches like Icotyde, Rybrevant and Inlexzo, which can offset the ongoing impact of Stelara biosimilar competition. On the second-quarter conference call, J&J said that it is seeing strong launches of all these new drugs, Inlexzo, Icotyde and Imaavy.
However, other than the Stelara LOE impact, J&J expects generic impact for both Simponi and Opsumit to begin in 2026 as the drugs lose patent protection.
Overall, J&J expects continued above-market growth for the Innovative Medicine segment through the remainder of 2026. In fact, Innovative Medicine is expected to remain J&J's primary growth engine for the foreseeable future.
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) , Amgen (AMGN - 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 so far this year. The stock has risen 26.7% this year compared with 11.8% appreciation 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 21.07 forward earnings, higher than 18.72 for the industry. The stock is also trading above its five-year mean of 15.65.
The Zacks Consensus Estimate for 2026 earnings has risen from $11.58 per share to $11.65 per share over the past 30 days, while that for 2027 earnings has gone up from $12.65 per share to $12.80 over the same time frame.
J&J has a Zacks Rank #3 (Hold) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.