Johnson & Johnson is confident it can reach its target of $60 billion in pharmaceutical sales by 2025, predicting continued growth from its portfolio of cancer and immune disease drugs.
The target, first set in late 2021, is 14% higher than the $52.6 billion in drug sales that J&J on Tuesday reported it had earned last year. And reaching it will require faster growth than the 1.7% increase that sales figure represented over 2021’s total.
Across its entire business, J&J anticipates sales will grow between 4.5% and 5.5% next year and laid out expectations Tuesday for “above market growth” from its pharmaceutical division.
The new revenue and earnings guidance falls roughly in line with what analysts had been expecting, according to investment bank Cantor Fitzgerald. Still, executives at the drugmaker fielded questions in an earnings call about J&J’s ambitious 2025 sales target.
“If I think about the main disconnect between our forecast and [Wall Street’s] forecast, it's our multiple myeloma portfolio,” CEO Joaquin Duato said on the call Tuesday. “Our multiple myeloma portfolio is the most important driver of growth for our pharmaceutical group moving forward.”
J&J sells the multiple myeloma treatment Darzalex, which has become a mainstay in treatment regimens for the blood cancer. More recently, it has won Food and Drug Administration approvals in multiple myeloma for the cell therapy Carvykti and the bispecific antibody Tecvayli.
In December, J&J released data for another bispecific antibody called talquetamab that suggested it could be a promising option as well. J&J is studying combinations of talquetamab with Tecvayli as well as with Carvykti, Duato said.
The executive added that J&J expects its new multiple myeloma therapies will complement existing treatments rather than cannibalize each other’s sales.
Results from a closely watched study of Carvykti in earlier-line treatment of multiple myeloma are expected soon, but Duato said timing its readout is difficult because the trial is event-driven.
Growth from J&J’s cancer drug portfolio will help offset weakness from collapsing sales of J&J’s COVID-19 vaccine, which has become a secondary option, and loss of market exclusivity for the company’s rheumatoid arthritis drug Stelara, which is facing biosimilar competition.
While J&J expects a steeper sales erosion for Stelara than it’s experienced with its inflammatory disease drug Remicade, it doesn’t foresee a large drop off this year, instead predicting flat-to-declining U.S. sales.
J&J needs its pharmaceutical division to deliver as it is preparing to spin out its consumer division into a new standalone company called Kenvue, which will leave a slimmed down J&J that’s more reliant on its drug unit.
J&J’s consumer division, which sells well-known products like Tylenol, earned $14.9 billion in sales in 2022, while medical devices made up $27.4 billion in sales.
For the overall company, full-year sales rose by 1.3% to $94.9 billion. At the growth rates forecast Tuesday, J&J’s sales would increase to between $96.9 billion and $97.9 billion next year.
The company’s fourth quarter performance was comparatively weaker, with overall revenue coming in slightly below Wall Street’s forecasts and pharma sales falling by 7.4% compared to the same period last year.
Shares traded lower by more than 1% midday Tuesday.
Editor’s Note: This story has been updated to include additional detail from J&J’s earnings call.