Johnson & Johnson Reports Q3 2020 Revenue of $21.1 Billion, Driven by Strong Immunology and Oncology Performance

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Recently, Johnson & Johnson released its financial report for the third quarter of 2020: sales revenue reached $21.082 billion, a year-on-year increase of 1.7%; U.S. market sales were $11.086 billion, up 2.7%, while international market sales amounted to $9.996 billion, rising by 0.6%. After excluding the net impact of acquisitions, divestitures, and currency exchange rate fluctuations, global sales grew by 2.0% based on operational performance, with domestic U.S. sales increasing by 2.8% and international sales growing by 1.1%. Diluted earnings per share (EPS) stood at $1.33, marking a 101.5% rise compared to the same period last year; adjusted diluted EPS was $2.20, representing a 3.8% increase from the previous year.

By business segment, Consumer Health sales amounted to $3.514 billion, Pharmaceutical sales to $11.418 billion, and MedTech sales to $6.15 billion. Excluding the net impact of acquisitions and divestitures, adjusted operational results changed year-over-year by +3.1%, +4.7%, and -3.3%, respectively.

Driven by economic recovery, strong momentum, and a robust business foundation, Johnson & Johnson raised its full-year sales forecast by $1 billion and increased its earnings per share guidance by $0.15.

In the pharmaceutical business, by disease area, Immunology sales were $3.789 billion (up 1.9%), Oncology sales were $3.129 billion (up 12.4%), Neuroscience sales were $1.605 billion (up 0.4%), Infectious Diseases sales were $864 million (up 3.6%), Pulmonary Arterial Hypertension sales were $749 million (up 13.9%), while Cardiovascular & Metabolic & Other sales were $1.281 billion (down 2.5%).

Among these, multiple drugs in the immunology portfolio demonstrated strong performance, including Stelara (up 14.7%), Tremfya (up 13.1%), and Erleada (up 140%), while Remicade declined by 18.9%. Furthermore, several drugs in the oncology portfolio also showed robust growth, including Darzalex (up 43.8%) and Imbruvica (up 11%); notably, however, Zytiga and Velcade decreased by 20.4% and 30.1%, respectively. In the pulmonary arterial hypertension segment, Opsumit and Uptravi performed strongly, with increases of 14.5% and 13.0%, respectively.

In the report, Johnson & Johnson also reviewed its pipeline and business updates for the third quarter of 2020:

Regulatory Approval:Thermocool Smarttouch SF Ablation Catheter Receives FDA Approval for the Treatment of Persistent Atrial Fibrillation; Simponi Aria Receives FDA Approval for the Treatment of Polyarticular Juvenile Idiopathic Arthritis (pJIA) and Juvenile Psoriatic Arthritis (jPsA) in Patients Aged 2 Years and Older; Spravato Receives FDA Approval for the Treatment of Adult Patients with Major Depressive Disorder (MDD) with Acute Suicidal Ideation or Behavior, Providing Rapid Reduction of Depressive Symptoms; Darzalex Combination Therapy Receives FDA Approval for the Treatment of Adult Patients with Relapsed or Refractory Multiple Myeloma (R/R MM) Who Have Previously Received 1–3 Prior Therapies; Stelara Receives FDA Approval for the Treatment of Pediatric Patients with Moderate to Severe Plaque Psoriasis.

Regulatory Submission:Submitted a marketing application to the FDA for the intravenous formulation of Uptravi for the treatment of adult patients with pulmonary arterial hypertension (PAH); Stelara for the treatment of pediatric patients with moderate-to-severe plaque psoriasis (US); submitted an application to the FDA for Darzalex Faspro for the treatment of light-chain (AL) amyloidosis.

Other:Reached an agreement with the European Commission to supply 200 million doses of the Janssen COVID-19 candidate vaccine to EU member states; completed the acquisition of Momenta Pharmaceuticals; initiated the pivotal global Phase 3 clinical trial of the Janssen COVID-19 vaccine; Cerenovus launched a new technology suite to advance stroke treatment; the Janssen COVID-19 vaccine demonstrated prevention of severe clinical disease in preclinical studies; Janssen terminated the pimodivir influenza development program; reached an agreement with the U.S. government to supply 100 million doses of the COVID-19 candidate vaccine; the FDA granted Breakthrough Device designation to Ethicon.

According to the pharmaceutical website FiercePharma, as COVID-19 continues to spread, some individuals still consider doctors’ offices off-limits, and clinical trials have been hindered by the pandemic—neither of which benefits pharmaceutical companies. Nevertheless, Johnson & Johnson outperformed the market in pharmaceutical business growth during the third quarter of 2020. With anticipated launches of new products and strong sales of newly branded drugs, the company is confident about its growth momentum in 2021.

Outstanding Performance in Immunology and Oncology

In the third quarter, Johnson & Johnson saw double-digit growth in seven branded drugs (Erleada, Darzalex, Imbruvica, Stelara, Tremfya, Opsumit, and Uptravi). Led by Stelara and Tremfya, its immunology business generated $3.8 billion in sales, becoming the company’s largest franchise. Oncology medicines (including Erleada, Imbruvica, and Darzalex) contributed $3.1 billion.

However, the situation remains far from optimistic. Sales of six branded drugs declined compared to the same period last year. The blockbuster drugs Remicade and Zytiga continued to face competition from generics and biosimilars. Many patients remain “cautious” about visiting physicians’ offices, and the decline in patient visits has led to fewer diagnoses and a reduced number of new patients initiating pharmacological treatment. Nevertheless, Johnson & Johnson CFO Joe Wolk stated that the number of patient visits is expected to increase with the rollout of COVID-19 vaccines and the wider adoption of therapeutic interventions.

Momentum to Remain Strong in 2021

Johnson & Johnson expects a broader product portfolio in 2021. During a conference call with analysts on Tuesday, Chief Financial Officer Joe Wolk stated that market penetration of Stelara for ulcerative colitis and Tremfya for psoriatic arthritis would help sustain the momentum of its immunology business in 2021. Additionally, the company plans to submit marketing applications in the near term for its BCMA CAR-T therapy for multiple myeloma and amivantamab for non-small cell lung cancer (NSCLC).

In the first nine months of 2020, Johnson & Johnson’s pharmaceutical business reported global sales of $33.3 billion, representing a 5.2% year-over-year increase. Joe Wolk stated that, overall, the company expects its pharmaceutical segment to achieve “strong, volume-driven growth” in 2021.

Nevertheless, pricing pressure may emerge as a significant factor affecting the pharmaceutical industry in 2021. If U.S. unemployment remains high, the number of patients with commercial insurance will decline, and commercial insurance covers the majority of prescription drug costs. Additionally, both U.S. President Trump and his Democratic challenger, Joe Biden, have pledged to reform drug pricing, and industry attention to this issue is likely to persist following next month’s presidential election.

However, Jennifer Taubert, Chair of Johnson & Johnson’s Pharmaceutical Business, emphasized on the call that the growth of its pharmaceutical business was “driven entirely by volume, not price.”

References:

1.Johnson & Johnson Reports 2020 Third-Quarter Results

2.Johnson & Johnson's immunology, cancer blockbusters deliver Q3 growth—and fuel hopes for 2021