Johnson & Johnson reported first-quarter earnings that beat Wall Street expectations, driven by robust sales of key pharmaceuticals. The company posted $24.1 billion in revenue, up nearly 10% year-over-year, and reported adjusted EPS of $2.70. Growth was primarily fueled by strong demand for Darzalex and Tremfya, which significantly outperformed analyst predictions. However, the quarter was marked by a steep decline in Stelara sales, which lost patent protection and faced biosimilar competition. Despite this challenge, J&J raised its full-year 2026 revenue forecast to $100.8 billion. Furthermore, the company voiced concerns over proposed MFN drug pricing deals, warning that such policies could negatively impact patient access and innovation.
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Johnson & Johnson reported first-quarter earnings that surpassed Wall Street expectations, driven by strong demand for key drugs, even as sales of its blockbuster autoimmune drug, Stelara, faced a significant decline.
Financial Performance Overview
The drug and device maker announced first-quarter revenue of $24.1 billion, marking an increase of nearly 10% year-over-year. This figure exceeded analyst estimates of $23.6 billion. Adjusted earnings per share (EPS) came in at $2.70, surpassing the consensus estimate of $2.66.
Key Growth Drivers
Strong performance in specialized therapeutic areas was the primary catalyst for the quarter's beat. Key contributors included:
Darzalex: Sales of the blood cancer therapy were $4.0 billion, significantly beating analyst expectations of $3.4 billion.
Tremfya: Used to treat psoriasis and inflammatory bowel diseases, Tremfya generated $1.6 billion, surpassing the expected $1.2 billion.
Medical Technology: Quarterly sales for the medical technology business rose 7.7% to $8.6 billion, aligning with analyst expectations.
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CFO Joseph Wolk noted that the increased usage of Tremfya suggests patients are opting for alternative treatments rather than switching to biosimilars.
Challenges and Market Headwinds
The company's flagship autoimmune drug, Stelara, faced considerable pressure. After losing patent protection last year, sales of the drug dropped by approximately 60% compared to the previous year, reaching $656 million.
Full-Year Outlook and Policy Concerns
Despite the decline in Stelara sales, J&J raised its full-year 2026 revenue forecast, setting a new midpoint of approximately $100.8 billion, which is slightly above Wall Street's estimate of $100.6 billion. The adjusted earnings outlook was also lifted to $11.55 per share at the midpoint.
Separately, J&J expressed concern regarding proposed Most-Favored-Nation (MFN) drug pricing deals associated with the Trump administration. Wolk stated that codifying such deals could be detrimental, warning that price controls often lead to reduced patient access to essential medicines and stifle innovation.
