What to expect from Johnson & Johnson’s pharmaceutical business?
Johnson & Johnson (NYSE: JNJ) has a portfolio of in-demand pharmaceuticals, some of which are about to expire. However, they are by new drugs with excellent market prospects. Thus, the pharmaceutical business of Johnson & Johnson yet.
One of Johnson & Johnson’s most popular drugs, Stelara, will lose patent protection in 2023. The drug now accounts for about $ 4.4 billion a year, representing 10% of the total revenue and 20% of the pharmaceutical division’s revenue.
Johnson & Johnson to compensate for the potential drop in revenue from this drug following other developments’ loss of patent protection. For example, Tremfya increased sales by more than 40% YoY to $ 897 million in the year’s first half. This drug is widely used by doctors and patients worldwide because it alone is already able to compensate for the decline in revenue from Stelara.
Another drug, Darzalex, was first approved by the FDA in 2015, giving the drug a lot of room to grow beyond the current decade, thanks to patent protection. Darzalex’s revenue in the first half grew by 50% YoY to $ 2.8 billion. As a result, Johnson & Johnson and AbbVie’s cancer blockbuster Imbruvica is unlikely to face generic competition until the beginning of the next decade.
The share of Johnson & Johnson in sales of this drug first half-year rose by 13% to $ 2.24 billion. However, in recent weeks, Johnson & Johnson shares have lost about 10% of value. The decrease is due to the discussion in the US Congress of a bill reduction in drug prices for the state Medicare insurance system. Such a law would help the US government save about $ 500 billion over the next ten years.
Although blocked the bill, its consideration itself influenced the quotes of the largest pharmaceutical companies, including Johnson & Johnson. With the US pharmaceutical industry gaining $ 539 billion last year alone, a $ 500 billion drop in pharmaceutical industry revenues over a decade would result in only marginal damage to industry sales. In Johnson & Johnson’s case, total revenue would have dropped by about 3%.
The reason is that nearly 50% of Johnson & Johnson’s total sales in the first half of this year came from outside the United States. Pharmaceutical revenues in the United States accounted for only 29.2% of Johnson & Johnson’s total sales in the first half. Thus, even if the named bill Johnson & Johnson will not suffer severe losses. At the auction on October 5, the JNJ share was worth $ 159.58.
