Johnson & Johnson Reports $85.2 Billion in 2023 Revenue Amid Patent Cliff Challenges

On January 23, Johnson & Johnson's official website released its Q4 2023 financial report as well as the full-year financial report, showing that its performance exceeded Wall Street expectations. The Q4 2023 revenue was $21.4 billion, higher than the expected $21.01 billion, representing a 7% year-over-year increase.

Johnson & Johnson's total sales for 2023 increased by 6.5% year-over-year, reaching $85.2 billion, with pharmaceutical revenue at $54.8 billion.

Image Source: Johnson & Johnson Official Website

Pharmaceuticals and Medical Devices Businesses Advance Side by Side

Since announcing the spin-off of its healthcare business in August 2023, Johnson & Johnson has focused on two major business segments: transformative pharmaceuticals and medical technology solutions.

Pharmaceutical Business Revenue in Q4 was $13.72 billion, a 4% increase compared to the same period in 2022. Full-year revenue for 2023 reached $54.759 billion, marking a year-on-year growth of 4.2%.

As one of the best-selling products in Johnson & Johnson's pharmaceutical business, Stelara (Ustekinumab) generated $10.9 billion in sales in 2023, representing an 11.7% increase from 2022.

Stelara's patent expired in September 2023. However, Johnson & Johnson has reached an agreement with competitors to delay the launch of biosimilars. Amgen is at the forefront, agreeing not to launch before 2025, which means Stelara can continue to generate revenue for Johnson & Johnson in 2024 and 2025. The launch of biosimilars in Europe is expected to be earlier, possibly around mid-2024.

Johnson & Johnson's oncology drug portfolio is also the leader in sales for its pharmaceutical business. Darzalex (daratumumab), an immunotherapy drug for multiple myeloma (MM), achieved full-year sales of $9.7 billion, representing a year-over-year increase of over 22%. Thanks to its comprehensive treatment process for multiple myeloma (MM), Darzalex continues to expand its market share and has strong potential to become a blockbuster worth billions.

In addition, products such as Erleada (apalutamide), Imbruvica (ibrutinib), Zytiga (abiraterone), and Carvykti (cilta-cel) also played a strong driving role.

Carvykti, the CAR-T therapy co-developed with Legend Biotech, achieved approximately US$159 million in sales for Q4 2023, a significant increase of 194% compared to 2022; total sales for 2023 reached US$500 million, marking a year-over-year growth of 276%, and it is only a matter of time before it surpasses the US$1 billion milestone.

In 2023, Carvykti also achieved significant progress. The Phase III clinical CARTUDE-4 study, which focused on adult patients with multiple myeloma (MM) who had received one to three prior lines of therapy and were lenalidomide-resistant, demonstrated stunning efficacy results, reducing the risk of disease progression or death by 74%. Based on these findings, the FDA has accepted the marketing application for Carvykti as a second- to fourth-line treatment for MM patients, with a PDUFA date set for April 5, 2024.

In the medical device business, the medical device business has steadily recovered from the decline caused by the COVID-19 pandemic. In the fourth quarter, sales of medical devices increased by 13.3% compared to the same period in 2022, reaching 7.67 billion U.S. dollars.

Johnson & Johnson CFO Joseph Wolk attributed the growth of the medical device business to a further increase in the number of surgeries in December 2023, as well as the company's $16.6 billion acquisition of heart pump company Abiomed at the end of 2022.

Johnson & Johnson: Unafraid of the Patent Cliff

Despite Johnson & Johnson's 2023 revenue showing growth compared to 2022, the company had previously forecasted its 2024 full-year sales to be between $87.8 billion and $88.6 billion. The market reaction to this figure was not optimistic, with the company’s stock price dropping by approximately 3% during Tuesday’s early trading session.

Johnson & Johnson's annual revenue fell short of expectations, possibly due to the patent cliff of its leading product, Stelara.

As Stelara biosimilars are set to enter the European market in 2024, this presents a patent challenge that Johnson & Johnson cannot avoid. However, Johnson & Johnson has expressed confidence in facing the patent cliff.

In a corporate business update in December 2023, Johnson & Johnson stated that it expects to launch 20 novel innovative drugs by 2030, with 10 assets having peak sales potential of at least $5 billion, and 15 drugs expected to reach blockbuster status.

Johnson & Johnson has also set an ambitious goal to become a pharmaceutical company with annual sales of $60 billion by 2025, planning to demonstrate its commitment to continue expanding and diversifying its pharmaceutical products by targeting viruses that have long evaded vaccine manufacturers.

At the 42nd J.P. Morgan Healthcare Conference, which concluded not long ago, Johnson & Johnson CEO Joaquin Duato stated that 2023 was a good year for the company from both a growth and strategic perspective, with a 7.5% increase in adjusted revenue from its medical technology business in the first nine months.

In the second half of the decade-long strategy, Johnson & Johnson Medical will achieve high growth through three key drivers:

First, shift the product portfolio to faster-growing markets driven by innovation. In 2023, 50% of sales came from markets growing by over 5%. By 2027, it is expected that one-third of Johnson & Johnson Medical’s sales will come from new products, such as its soft tissue robotic system Ottava and pulsed field ablation product VARIPULSE.

Second, further expand overseas influence. Fifty percent of Johnson & Johnson Medical's sales come from outside the United States.

Third, continue to work on improving the operational resilience of the supply chain and increasing profit margins. A restructuring plan was previously announced in the orthopedics field to enhance profitability.

Summary

Despite the patent challenges faced by the blockbuster Stelara, Johnson & Johnson still has a strong pipeline in the autoimmune sector, and its oncology products continue to gain momentum, particularly the standout performance of its CAR-T star therapy, Carvykti. Overall, Johnson & Johnson is poised for continued high growth in 2024.

Source:

1.https://www.biospace.com/article/j-and-j-narrowly-beats-q4-expectations-reports-21-4b-in-revenue-as-faces-patent-cliff-/

2. Johnson & Johnson Official Website

Editor: Pea Shooter

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