Johnson & Johnson Reports Strong Q3 2021 Results with $5 Billion in COVID-19 Vaccine Revenue, Announces Leadership Transition

October 19，Johnson & Johnson released its Q3 financial report.! As the undisputed leader among global healthcare companies, its revenue performance has attracted widespread attention.

Financial reports show that Johnson & Johnson's Q3 performance remains outstanding,GeneralRevenue was $23.338 billion, up 10.7% year-on-year.. Among them,

• `Pharmaceutical Business`Revenue was $12.994 billion, year-on-year+13.2%；

• `Consumer Health Business`Revenue was $3.70 billion, up 4.1% year-on-year;

• Medical Device BusinessContinued recovery, revenue of $6.644 billion, up 7.0% year-over-year.

Compared to its first-half performance, Johnson & Johnson's Q3 growth remained relatively stable. Let's take a look at the specific performance across its business segments.

The Q3 2021 financial report shows that Johnson & JohnsonGlobal revenue was $23.338 billion, up 10.7% year-over-year.. Earnings per share was $1.37, up 3.0%.

Sales Across Three Major Divisions Rose Collectively:

• Core SectorsPharmaceuticalsYear-on-year revenue increased by 13.2%, with immunology and oncology products ranking in the top two. The single-dose COVID-19 vaccine generated $500 million but fell significantly short of competing products.

• Medical DevicesIndustryAffairsContinues to recover,Year-on-Year+8%。Last year, due to the pandemic, forcing`Enable hospital selectivity`PushPostpone some surgeries,The DepartmentDoorwas severelyHeavy blow.
  

• Consumer Health BusinessIn line with expectations, +4.1% YoY.
  

▲Q3 2021 Johnson & Johnson Total Revenue

▲ Q3 2021 Johnson & Johnson Revenue by Business Segment

Pharmaceutical Business:

Q3 2021,The pharmaceutical business remainsJohnson & Johnson Core Business Segments，Revenue of $12.994 billion, up 13.2% year-on-year.

Immunology and oncology products are the primary revenue drivers for Johnson & Johnson Pharmaceuticals.。Immunology ProductsUstekinumabRemains the core growth driver in the immunology franchise; new blockbuster drugs`Guselkumab`Strong performance, demonstrating growth potential; multiple myeloma drugsDarzalexThe most significant blockbuster among oncology drugs. ButInfliximabContinues to face competition from biosimilars; as in the previous quarter, sales continued to decline.

By business segment,

Immunology Field:Revenue$4.25 billion, year-on-year+11.7%, with the U.S. market +8.3% and the international market +18.8%.

• Remicade (Infliximab)Revenue: $761 million, down 18.3% year-over-year;

• SiSimponi (golimumab)Revenue of $571 million, down 3.1% year-on-year;

• Stelara (Ustekinumab)Revenue: $2.378 billion, up 21.7% year-over-year;

• Tremfya (Guselkumab), revenue of $537 million, up 63.5% year-on-year.

Infectious Diseases:Revenue$1.389 billion, year-on-year+59.8%, with the main growth driver stemming from COVID-19 vaccines.

• COVID-19 vaccineAd26.COV2.SRevenue of USD 502 million;

• HIV-1 Infection DrugsEdurantRevenue $259 million, +8.6% year-on-year;

• HIV-1 Infection DrugsPrezistaRevenue of $517 million, down 2.2% year-on-year.

Neuroscience:`Revenue`$1.689 billion, year-on-year+4.6%；

• Drugs for the Treatment of SchizophreniaInvega SustennaRevenue in the neurosurgery segment was the highest at $1.004 billion, up 8.1% year-on-year.

Tumor:Revenue$3.665 billion, year-on-year+16.5%. Sales of multiple drugs remained very strong, consistent with the previous quarter,

• Multiple Myeloma DrugsDarzalexRevenue of $1.58 billion, up 42.9% year-on-year;

• Drugs for the Treatment of B-Cell MalignanciesImbruvicaRevenue of USD 1.066 billion, +2.5% YoY;

• Next-Generation Androgen Receptor Inhibitors for the Treatment of Patients with Prostate CancerapalutamideRevenue (US$344 million), though relatively modest, increased by 65.8% year-on-year.

Pulmonary arterial hypertension:Revenue$868 million, year-on-year+16.1%；

• primarily consisting of pulmonary arterial hypertension drugsOpsumitstrongly driven by (+17.1%) and Uptravi (+18.8%).

Cardiovascular/Metabolic/Other:Revenue$1.133 billion, year-on-year-12.4%。

• Its main product is a drug for type 2 diabetes.Invokana(Canalixine) (-41.3) Erythropoiesis-Stimulating AgentProcrit(-15.8%) significant decline.

Medical Devices Business:

Previously, the COVID-19 pandemic continued to have a negative impact on the global medical device industry., the pandemic forced hospitals to postpone elective surgeries, and Johnson & Johnson's business in this division was also severely impacted. InIn the third quarter of this year, the recovery outlook for Johnson & Johnson's MedTech business is relatively optimistic, with totalRevenue was$6.644 billion, +7.0% YoY。# Four Major Business SegmentsWith the exception of the orthopedics segment, all other segments experienced growth.。

• `Interventional Solutions`Revenue of $957 million, up 13.2% year-on-year;

• # OrthopedicsRevenue was $2.093 billion, down 0.3% year-over-year, with the primary decline stemming from the Spine & Other segment, while all other sub-segments posted growth; the business contraction was partly attributable to Johnson & Johnson's sale of Codman Neurosurgery, a manufacturer of spinal and cranial repair products, to Integra LifeSciences in 2017;

  
  

  

  ▲ Johnson & Johnson Orthopedics Q3 2021 Revenue Data
  

  （Orthopedics Hip: Revenue $356 million, +2.3% YoY; Knee: Revenue $316 million, +2.1% YoY; Trauma: Revenue $715 million, +3.7% YoY, primarily driven by growth in the U.S.; Spine & Other: Revenue $705 million, -6.3% YoY)

  
  

• SurgeryRevenue of $2.405 billion, up 10.2% year-on-year;

• Vision CareRevenue of $1.189 billion, up 10.0% year-over-year.

Consumer Health Business:

Q3 2021, Johnson & Johnson Consumer Health BusinessRevenue: $3.70 billion, +4.1% YoY；

• Growth was primarily driven by over-the-counter (OTC) products. The main contributor was analgesics.TylenolandMotrin, upper respiratory and gastrointestinal products, as well as skin health/beauty productsAveeno。

`Johnson & Johnson Revenue by Region`

▲Q3 2021 Johnson & Johnson Regional Revenue Data

United States Region:Remains Johnson & Johnson's largest market, with revenue of RMB 11.963 billion, up 7.9% year-on-year.

International Regions:Revenue reached RMB 11.375 billion, up 13.5% year-on-year.

Overall, Johnson & Johnson's better-than-expected profits were driven by the pharmaceutical segment's strong performance outpacing the market, the continued recovery in the medical device business, and steady growth in the consumer health division. This has strengthened the company's confidence in its full-year earnings growth. Accordingly, Johnson & Johnson raised its full-year 2021Performance guidance, including the COVID-19 vaccine, projects adjusted sales to reach $92.8–$93.3 billion, up 12.9%–13.5% year-on-year.

It should be noted that,Although Johnson & Johnson’s COVID-19 vaccine Q3 revenue ($502 million) increased compared to the previous quarter ($164 million), it fell short of the expected $815 million and, compared to competing products, remains far from ideal.。

H1 2021 RevenueIn this regard, Pfizer, BioNTech, and Moderna have reaped substantial profits from COVID-19 vaccines,

• PfizerSales of the BNT162b2 COVID-19 vaccine reached $11.3 billion;

• BioNTechCOVID-19 vaccine revenue: $8.44 billion;

• ModernaCOVID-19 vaccine revenue reached $5.93 billion, and buoyed by this market capitalization, it ranked among the top 10 global pharmaceutical companies.

Compared to the Pfizer/BioNTech and Moderna vaccines launched at the end of last year,The Johnson & Johnson vaccine was not approved until March this year, thereby losing its first-mover advantage in the global market. Additionally, the vaccine was embroiled in a controversy over adverse reactions, which temporarily triggered a crisis of public confidence., thereby resulting in unsatisfactory sales of the Johnson & Johnson vaccine.

ForSales Outlook，

• Johnson & JohnsonMaintains this year's COVID-19 vaccine sales outlook at $2.5 billion;

• andPfizerThe company raised its full-year COVID-19 vaccine revenue guidance to $33.5 billion;

• ModernaThis year's vaccine sales could exceed $17.1 billion.

Recently, Johnson & Johnson requested FDA approval for its single-doseCOVID-19 Vaccine Booster. On October 15, the booster doseReceived FDA Advisory Committee Support, the advisory panel voted 19-0 to recommend a second dose of the Johnson & Johnson vaccine for individuals aged 18 and older at least two months after their first dose. The FDA may decide in the coming days whether to approve a Johnson & Johnson vaccine booster.

Meanwhile, Johnson & Johnson stated that it expects to no longer sell its COVID-19 vaccine on a non-profit basis by the end of next year or early 2023.

Since receiving regulatory approval, the Johnson & Johnson vaccine has been sold at a not-for-profit price of $5–$8 per dose and currently follows a single-dose regimen. However, with the booster dose set to gain approval,Johnson & Johnson Will Seek Full Regulatory Approval to Transition to Commercial Sales。

However, withGlobal Pandemic Gradually Easing, andThe Impact of Oral COVID-19 Drugs, The path for the Johnson & Johnson vaccine to drive commercial performance has not been entirely smooth.

Johnson & Johnson CEO Alex Gorsky expressed overall satisfaction with this quarter's results, stating: "In the face of changing market dynamics driven by the impact of the COVID-19 pandemic and other global trends, Johnson & Johnson continues to demonstrate sufficient responsiveness and flexibility. I am incredibly proud of the company's transformational growth over the past decade."

Meanwhile,Gorsky also reiterated the news of his impending departure in the earnings report.。

Earlier on August 19, Gorsky, who had served as CEO of Johnson & Johnson for nearly a decade, announced he would step down and be succeeded by his longtime deputy, Duato, on January 3, 2022.

▲ Left: Alex Gorsky; Right:Joaquin Duato

However, it should be noted that the leadership transition at Johnson & Johnson may impact its future performance.

Gorsky has served as Chairman and CEO of Johnson & Johnson since 2012. During his tenure, he has delivered outstanding results, driving the company's market capitalization from nearly $180 billion to over $470 billion.

Nevertheless,With the pandemic's aftermath still lingering, pharmaceutical R&D innovation and sales transformation still require further exploration. For Johnson & Johnson, this leadership transition occurs during a challenging period.。

Furthermore, replacing the CEO may also incur "disruption costs".. When Duato assumes office, it may still take some time to adapt to the new company's business operations and organizational structure. However, given that Duato is a prominent executive with a proven track record, the transition is expected to proceed smoothly.

Newly appointed CEO Duato, prior to becoming Gorsky’s deputy, previously led Johnson & Johnson’s pharmaceutical business during his 32-year tenure at the company. During this period, he drove accelerated growth and profitability in the pharmaceutical and consumer health businesses, and helped guide the corporate strategic planning process encompassing all three of the company’s business segments.

Having worked together for many years, Duato and Gorsky share a close relationship, which may indicate that the company’s strategic direction under the new leadership will not diverge significantly from the course set during Gorsky’s tenure at the helm.。

MeanwhileDuatoalso holds key positions in many international organizations, isFormer President of the trade association of leading U.S. biopharmaceutical research companies (PhRMA), and is alsoBoard Member, UNICEF USA and Tsinghua University School of Pharmaceutical Sciences、Current Executive Sponsor of the Johnson & Johnson African American Leadership Council。

By leveraging these opportunities, Johnson & Johnson may integrate new external resources and identify new external opportunities.。

Whether the appointment of the new CEO represents merely a leadership transition or a strategic shift remains uncertain; the answer will ultimately be reflected in the company's short- and long-term performance following their assumption of office.

To seek new business growth drivers, Johnson & Johnson has recently made new strategic deployments across multiple fields.

Medical Devices:

• August 24: Johnson & Johnson Leads RMB 85 Million Investment in FlexDex Surgical’s Low-Cost Innovative Minimally Invasive Surgical Robot, Entering the Abdominal Surgery Sector。

  
  

  Driven by this round of financing, FlexDex will upgrade its existing products for endoscopic suturing and expand its product portfolio with a full range of robotic-enabled laparoscopic instruments,Poised to become a "game changer"。

  
  

Pharmaceutical Manufacturing:

• On October 4, Johnson & Johnson entered into a collaboration agreement with Xencor to acquire global rights to Xencor's CD20/CD3 bispecific antibody, thereby positioning itself in the first tier of the bispecific antibody therapy landscape for hematologic malignancies.. Under the agreement, Johnson & Johnson will pay a $100 million upfront payment and make a $25 million equity investment in Xencor, plus an additional $1.188 billion.

  
  

• On October 11, an NMPA announcement indicated that the marketing authorization application for Janssen's (a Johnson & Johnson company) daratumumab subcutaneous injection, a CD38 monoclonal antibody, has been approved in China., the approved indication is for patients with primary light-chain amyloidosis.

  
  

  Daratumumab generated global sales of $4.19 billion in 2020, representing a year-on-year increase of 39.8%, making it a blockbuster drug for Johnson & Johnson. Currently, 10 clinical trials for this injectable formulation are underway, aimed at expanding its indications and capturing a larger market.

Product iterations are proceeding systematically, with new products also being successively launched,Johnson & JohnsonAttempting to further strengthen the competitive advantages across its various business segments. Amid these strategic initiatives, what will Johnson & Johnson's future development trajectory be? We will continue to closely monitor developments!

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