Johnson & Johnson Beats Expectations, Raises Full-Year Revenue Guidance Amid Tariff Pressures

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On April 15, 2025, local time, Johnson & Johnson announced its Q1 2025 financial report, with single-quarter revenue reaching$21.9 billion, a year-on-year increase of 4.2%.Among them, the global sales of Johnson & Johnson Innovative Pharmaceuticals reached 13.9 billion US dollars, increasing by 2.3% year-on-year.

In terms of specific revenue, among all innovative drug sectors,Tumors and autoimmune diseases remain the main force., respectively contributing$5.678 billionAnd$3.707 billionAmong them, the oncology sector grew by 17.9% year-on-year, driving most of the growth. Specifically, multiple myeloma...（MM）Drug Darzalex(Daratumumab)Q1 total revenue was $3.24 billion, a year-on-year increase of 20%, far exceeding expectations. The rest includes apalutamide.（ERLEADA）、Cilta-cel（CARVYKTI）, Tefucaili（TECVAYLI）With Tavikli（TALVEY）The sales of products such as Stelara also showed significant growth. Although the autoimmune segment accounts for a high proportion of revenue, it was affected by the large单品 Stelara.(Ustekinumab)Due to patent expiration, the entire sector's revenue declined by 12.7%.

Image Source: Johnson & Johnson Official WeChat Account

It is worth noting that Johnson & Johnson announcedQ1 Revenue and Profit Exceed Wall Street Expectations.And, even under the pressure of tariffs and the IRA bill, the company still raised its full-year sales forecast, expecting this figure to be higher than previously predicted in the 2024 annual report.$90.9~91.7 billion, reaching$91.6 billion to $92.4 billion.......

Johnson & Johnson: Where Does the Confidence Come From?

As we all know, in the next decade, many multinational corporations (MNCs) will face the patent cliff. Johnson & Johnson is one of these MNCs that cannot be ignored.

On the one hand,Johnson & Johnson's Core Autoimmune Product - Ustekinumab Patent Expires, is facing fierce competition from biosimilars. In January 2025, the previously reached settlement agreement will expire, and Amgen's Wezlana has already been launched in the U.S. market. Meanwhile, it is expected that several other biosimilars from companies such as Teva Pharmaceuticals, Alvotech, Sandoz, Samsung Bioepis, and Biocon Biologics will follow. Based on the revenue of ustekinumab in the last quarter, this product generated $1.63 billion in Q1, a significant year-over-year decrease of 34%. However, it is worth noting that this figure is still higher than the market's previous expectation of $1.42 billion.

On the other hand, it is necessary to considerImpact of the IRA BillIn the first batch of drug list that required price negotiation released in the last autumn, there were three drugs from Johnson & Johnson, respectively.Ustekinumab、Xareltoas well as Johnson & Johnson and AbbVieImbruvica. The price reductions for the three drugs are respectively66%、62%and38%The results of the first batch of price negotiations will be officially implemented next year. However, considering the current situation, this point may change, as we still do not know how the current government will implement the IRA bill.

Under the above-mentioned severe difficulties,What is the basis for Johnson & Johnson's continuous increase in revenue forecasts?？

In this regard, Johnson & Johnson clearly stated in its announcement that its growth forecast for the company's full-year revenue mainlyMainly from the acquisition of Intra-Cellular Therapies.

On April 9, 2025, Johnson & Johnson officially announced the completion of its acquisition of Intra-Cellular Therapies. Intra-Cellular Therapies focuses on the research and development of drugs for mental illnesses, with its core product being CAPLYTA, a drug targeting bipolar disorder.（lumateperone）CAPLYTA is currently the only atypical antipsychotic approved on the market for bipolar depression. Clinical trial data show that in patients with bipolar depression, the MADRS depression score of the experimental group improved significantly over placebo by Week 6, with a remission rate.(≥50% reduction in MADRS score)Up to 51% vs 34%(Placebo)。

Johnson & Johnson’s Acquisition of Intra-Cellular Therapies to Boost Revenue and ExpertiseJohnson & Johnson's acquisition of Intra-Cellular Therapies will not only provide revenue support from CAPLYTA. It is reported that by 2025, Johnson & Johnson is expected to generate an additional $700 million in revenue from this acquisition, with a potential sales growth increase of 0.8%. Additionally, the acquisition will grant Johnson & Johnson access to Intra-Cellular Therapies' years of experience in the psychiatric disorders field, filling a gap in their portfolio.

How Does Johnson & Johnson View Tariffs?

In addition to the patent cliff and the IRA bill,TariffIs another issue that a group of MNCs and American pharmaceutical companies have to face.

Just over half a month ago, during the back-and-forth on tariffs, Johnson & Johnson announced that it would increase its investment in manufacturing, R&D, and technology in the United States over the next four years, with the specific investment amount exceeding$55 billionCompared with the previous four years, the investment has increased by 25%. The investment includes four planned new production facilities, of which the North Carolina facility, worth more than 2 billion US dollars, has already broken ground.

While releasing the financial report this time, Johnson & Johnson CEO Joaquin Duato raised concerns about the Trump administration's drug tariff plan.Subtle but Clear Criticism, considering the matterTaxes Are Not an Effective Tool for Bringing the Pharmaceutical Manufacturing Industry Back to the U.S.He suggested that a better approach would be through policies, such as the 2017 Tax Cuts and Jobs Act passed during Trump's first term.

Specifically, Duato said on Tuesday's earnings call, "There is a reason for zero tariffs on medicines. Tariffs can lead to supply chain disruptions and cause drug shortages." "If you want to build manufacturing capacity for medical devices and drugs in the U.S., the most effective answer is not tariffs but tax policy."

As a company that has always been at the forefront of releasing financial reports, any comments made by Johnson & Johnson's CEO on any issue are usually regarded as an industry bellwether. This implies that other several multinational corporations (MNCs) may also make statements on the tariff issue subsequently, and they might stand on the same side of the scale as Duato.

Johnson & Johnson CFO Joseph Wolk told The Wall Street Journal ahead of Tuesday's earnings call that the company would bear $400 million in tariff costs this year. However, this primarily targets medical device products. Wolk stated that Johnson & Johnson will observe the impact of tariffs on the biopharmaceutical and medical device sectors before making forecasts for 2026 and beyond, describing the current situation as "highly volatile."

In fact, regarding the issue of tariffs, there are indeed many unresolved matters. One of them is the tariff on pharmaceuticals. For companies like Johnson & Johnson or other multinational corporations (MNCs), revenue from pharmaceutical sales constitutes a significant portion of their total income. According to recent developments involving Trump, tariffs targeting pharmaceuticals are currently being formulated.

Just hours before Johnson & Johnson's earnings release, the U.S. Department of Commerce officially announced, based on the Trade Expansion Act of 1962,Article 232, initiate a national security investigation into imported drugs and semiconductor products.This move is widely considered by outsiders to be a precursor to imposing tariffs on these two industries.

When asked about this matter, Duato stated that the Section 232 investigation was something Johnson & Johnson had anticipated, and that Johnson & Johnson would "respect" the Trump administration's decision regardingThe decision of the Section 232 investigation. Meanwhile, it was added that the goal of Johnson & Johnson is to "ensure sufficient manufacturing capacity in the United States to respond to various situations."

References:

1.Official Websites of Various Companies

2.https://endpts.com/jj-ceo-chides-trumps-tariff-plan-to-boost-us-drugmaking/

3. Other Public Information

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