Johnson & Johnson Reports H1 2020 Revenue of $39.0 Billion Amid Pandemic, with Medical Devices Down 21%

In early 2020, amid the COVID-19 pandemic, sales in the pharmaceutical industry experienced a modest surge. On one hand, consumers stockpiled medications in large quantities for emergency preparedness; on the other hand, the pandemic heightened demand for vaccines and other pharmaceutical products.

In contrast: After Q1, the COVID-19 pandemic spread globally, and the pressure multinational pharmaceutical companies will face in Q2 may be far greater than imagined...

How Significant Is the Impact of the Overseas Spread of the Epidemic on Multinational Pharmaceutical Companies? Johnson & Johnson, a Leading Multinational Pharma Firm, Releases Its Semi-Annual Report!

Yesterday, Johnson & Johnson released its 2020 semi-annual financial report. The company's global revenue amounted to $39.027 billion, representing a year-on-year decrease of 3.8%, which exceeded expectations.

• Pharmaceutical business revenue was $21.886 billion, a year-over-year increase of 5.4%;

• Consumer Health business revenue was $6.921 billion, a year-over-year increase of 0.9%;

• Medical device business performance was lackluster, with revenue of $10.22 billion, a year-on-year decrease of 21.1%, marking the most significant decline for Johnson & Johnson in recent years.

▲ Johnson & Johnson Business Architecture

▲Johnson & Johnson’s Revenue by Business Segment in the First Half of 2020

Pharmaceutical Business:

In the first half of 2020, despite sluggish performance in its medical device business (-21.1%), Johnson & Johnson’s pharmaceutical division (+5.4%) continued to achieve positive growth, generating revenue of $21.886 billion. Apart from cardiovascular/metabolic products, the other five major product categories were key drivers sustaining the growth of Johnson & Johnson’s pharmaceutical business.

By business segment,

Immunology: Revenue of $7.161 billion, a year-over-year increase of 6.6%.

• Remicade (infliximab) generated revenue of $1.925 billion, a year-over-year decrease of 12.9%;

• Simponi (golimumab) revenue: 10.75, YoY -1.1%

• Stelara (ustekinumab) revenue of 3.516 billion, a year-on-year increase of 18.7%, is the core growth driver in the immunology field.

Infectious Diseases: Revenue of $1.798 billion, +5.3% year-over-year;

• Edurant, an HIV-1 infection medication, showed the fastest growth (+14.1%);

• Prezista, a drug for HIV-1 infection, generated the highest revenue of $1.089 billion.

Neuroscience: Revenue of $3.245 billion, a year-over-year increase of 2.5%;

• Invega Sustenna, a drug for treating schizophrenia, generated the highest revenue of $1.762 billion in the neuroscience business segment, with the fastest growth rate (+23.4%).

Oncology: Revenue of $5.804 billion, a year-over-year increase of 11.3%. Sales performance of its multiple drugs was very strong.

• Darzalex, a multiple myeloma drug, generated $1.838 billion in revenue, a 31% year-over-year increase;

• Imbruvica, a therapeutic agent for B-cell malignancies, generated $1.98 billion in revenue, representing a 22.6% year-over-year increase.

Pulmonary Arterial Hypertension: Revenue of $1.534 billion, +13.9% year-over-year

• Driven primarily by the strong performance of pulmonary arterial hypertension drugs Opsumit (+21.6%) and Uptravi (+32.7%);

Cardiovascular/Metabolic/Other: Revenue of $2.344 billion, a decrease of 10.5%.

• Its key products, the anticoagulant Xarelto (-0.5%), the type 2 diabetes drug Invokana (-6.4%), and the erythropoiesis-stimulating agent Procrit (-28.9%), are all experiencing a decline.

Medical Device Business:

All Four Major Segments of Johnson & Johnson’s Medical Device Business Decline, with Surgical Products Showing the Most Pronounced Drop; High-Margin Orthopedics and Vision Care Products Hit Particularly Hard

• Interventional Solutions revenue was $1.317 billion, a year-over-year decrease of 11.2%;

• Orthopedics revenue amounted to $3.489 billion, a year-over-year decrease of 21.2%;

• Surgical revenue was $3.651 billion, a year-over-year decrease of 23.1%;

• Vision Care revenue was $1.762 billion, a 23% decrease year-over-year.

▲Johnson & Johnson Medical Devices Revenue in the First Half of 2020

▲Johnson & Johnson Orthopedics Revenue Data for the First Half of 2020

Orthopedic Sub-specialties:

• Hip Joint: Revenue of $563 million, a year-over-year decrease of 22.3%; the international market saw the most significant decline at -25.4%, while the U.S. market decreased by 20.1%.

• Knee: Revenue of $517 million, a year-over-year decline of 30.1%, marking the steepest drop among Johnson & Johnson’s Orthopedics businesses. The international market saw the sharpest decline at -34.6%, while the U.S. market decreased by -27.1%.

• Trauma: Revenue of $1.207 billion, a year-over-year decrease of 11.1%, representing the smallest decline among Johnson & Johnson’s Orthopedics businesses in the U.S. market (-7.6%);

• Spine & Other: Revenue of $1.202 billion, a year-on-year decrease of 25.1%. Following Johnson & Johnson’s sale of its Codman Neurosurgery business to Integra for $1.05 billion in February 2017, this segment has experienced consecutive annual declines.

Consumer Health Business:

In the first half of 2020, Johnson & Johnson's Consumer Health business reported revenue of $6.921 billion, a year-on-year increase of 0.9%;

• Negatively impacted by the COVID-19 pandemic, primarily in skin health and beauty products, followed by women’s health products and international baby care products.

Johnson & Johnson Regional Revenue

▲Johnson & Johnson Regional Revenue Data for the First Half of 2020

U.S. Region: Remains the largest market for Johnson & Johnson Orthopaedics, with revenue of RMB 20.238 billion, a year-over-year decrease of 1.4%.

International Regions: Revenue of RMB 18.789 billion, a year-on-year decrease of 6.3%.

Latest Updates

Pharmaceuticals:

In the field of COVID-19 vaccines, Johnson & Johnson announced in early April that its subsidiary, Janssen Pharmaceuticals, would collaborate with the U.S. Biomedical Advanced Research and Development Authority (BARDA), jointly investing over $1 billion in the research and development of a COVID-19 vaccine, with a commitment to provide one billion doses globally.

Recently, US pharmaceutical company EBS announced that it has signed a five-year contract with Johnson & Johnson to produce the active pharmaceutical ingredients (APIs) required for its COVID-19 vaccine candidates.

Johnson & Johnson has also partnered with the U.S. government, securing a $1 billion investment to produce over 1 billion vaccine doses. Johnson & Johnson plans:

Initiate the first-in-human clinical study in July;

Preliminary clinical data obtained in December;

The first batch of vaccines will be available in Q1 2021, meeting the requirements for Emergency Use Authorization.

Medical Devices:

Impacted by the pandemic, elective surgeries worldwide have been canceled or postponed to conserve resources for treating patients with COVID-19.

Since the end of last year, elective surgeries in China have been continuously slowing down. Starting in March, hospitals in Japan, South Korea, Europe, and the United States also began to postpone or cancel elective surgeries.

This dealt a severe blow to Johnson & Johnson’s medical device business in the first half of the year. Two-thirds of the medical devices sold by Johnson & Johnson are used in hip and knee implant surgeries.

Johnson & Johnson expects its 2020 revenue to range from $77.5 billion to $80.5 billion, representing a year-over-year decline of 2.0% to 5.5%; the company had previously projected 2020 revenue of $85.4 billion to $86.2 billion, reflecting a year-over-year increase of 4.0% to 5.0%.

However, Johnson & Johnson stated that the decline in medical device sales is temporary.

Johnson & Johnson Is Not the Only Company Affected by COVID-19!

Concurrently with the release of its financial report, Johnson & Johnson Chief Financial Officer John Wolk projected that surgical procedures would begin to recover starting in the third quarter, with further improvement expected in the fourth quarter.

Furthermore, with Johnson & Johnson’s monopoly on the active pharmaceutical ingredients required for producing candidate COVID-19 vaccines, the company’s pharmaceutical business is poised for explosive growth in the future.