J&J Raises Full-Year Guidance Despite Stelara's Mounting Biosimilar and Innovative Drug Challenges

Johnson & Johnson released its Q3 earnings report on Tuesday local time, stating that its revenue growth was strong, surpassing Wall Street expectations, while also expressing greater optimism about the full-year outlook.Raises Full-Year Operational Sales Guidance to $89.4 - $89.9 Billion, Up from Prior Range of $89.2 - $89.6 Billion。

In the third quarter, the pharmaceutical company's sales reached nearly $22.5 billion, a year-on-year increase of 5.2%, surpassing the consensus expectation of nearly $22.2 billion.On the other hand, adjusted earnings per share decreased by 9% year-over-year to $2.42, but still outperformed analysts' expectations of $2.21.

But what is noteworthy in the Q3 earnings report is that Johnson & Johnson's autoimmune blockbuster Stelara also made a significant contribution to the overall sales of Q3, with sales for the quarter nearing $2.7 billion.But the revenue of this heavy-weight therapy has been eroded by increasingly fierce competition from biosimilars, with a 6.6% decline compared to the same period in 2023.

Including,In April 2024, the FDA approved Teva and Alvotech's biosimilar Selarsdi., used for the treatment of psoriatic arthritis and plaque psoriasis;Pyzchiva, a biosimilar by Samsung Bioepis in July 2024Approved by regulatory authorities, it will compete with Stelara in psoriatic arthritis, Crohn's disease, and ulcerative colitis. So far,FDA Approves Five Stelara Biosimilars。

And the subsequent innovative drug challengers have also stepped up their efforts. Recently,Lilly also announced the results of its Phase 3 trial, named VIVID-1, for the monoclonal antibody Omvoh. After 52 weeks of follow-up, more patients using Lilly's Omvoh showed a histological response, with a better 1-year histological response in Crohn's disease patients compared to Johnson & Johnson's best-selling drug Stelara.

Omvoh is a humanized IgG4 monoclonal antibody that selectively targets and inhibits the IL-23 cytokine, thereby preventing its interaction with the corresponding receptor. Through this mechanism of action, Omvoh modulates the differentiation, proliferation, and survival of several T cells and innate immune cells, exerting an overall suppressive effect on mucosal inflammation.

After 52 weeks of follow-up, a higher proportion of patients in the stabilized population treated with Omvoh achieved histological response according to the histopathological criteria of the European Crohn's and Colitis Organisation. This advantage was maintained even when focusing on the subgroup of patients who had active histological disease at baseline and experienced at least one prior biologic therapy failure. According to Eli Lilly, this efficacy difference was "nominally statistically significant." In terms of safety, the adverse events observed with Omvoh in the VIVID-1 trial were consistent with its known profile in ulcerative colitis. The most common side effects included anemia, arthralgia, and upper respiratory tract infections. Serious adverse events were more frequently observed in the placebo group.

Omvoh was approved by the FDA in October 2023 for the treatment of moderate to severe active ulcerative colitis.Lilly is working to expand the label for Omvoh, leveraging data from VIVID-1 released on Monday to support its regulatory submissions to the FDA and other global health authorities. Lilly is also continuing to expand its understanding of Omvoh's potential in treating inflammatory bowel disease, with ongoing trials in Crohn’s disease and pediatric ulcerative colitis.

If Eli Lilly successfully launches Omvoh for Crohn's disease, it will be a strong competitor to Johnson & Johnson's blockbuster drug Stelara.

Every step of Eli Lilly's strategy aligns with the statement by Mark Genovese, Senior Vice President of Eli Lilly's Immunology division, who said that the company "is setting higher standards for evaluating long-term treatment responses in inflammatory bowel disease," including "more ambitious goals for mucosal healing."

As Stelara sales growth slows, Johnson & Johnson's revenue engine is shifting toward oncology. Its oncology drugs generated a total revenue of $5.38 billion in Q3, accounting for 36.9% of total revenue, with a year-over-year increase of 18.7%.

Darzalex, a treatment for multiple myeloma, was the top-selling drug for Johnson & Johnson in Q3, with global sales exceeding $3 billion. Other standout drugs in Q3 included the antidepressant nasal spray Spravato, which saw sales grow by nearly 55%, and the CAR-T therapy Carvykti, which surged by almost 88% this quarter. The prostate cancer treatment Erleada also performed notably, with global sales reaching $790 million, reflecting a year-over-year increase of 25.4%.

References:

Johnson & Johnson Annual Report

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