- Johnson & Johnson's pharmaceutical unit has once again propelled its bottom line past Wall Street expectations. The unit grew 20% year-over-year, and accounted for about half of the $20.8 billion in company-wide sales recorded for the second quarter in results released Tuesday.
- Major growth drivers included the anti-inflammation drug Stelara, up 36% year over year, the multiple myeloma treatment Darzalex, up 71% year over year, and the prostate cancer therapy Zytiga, up 63% year over year. Yet on a July 17 earnings call, analysts noted that Zytiga, J&J's best-selling oncology product, could face generic competition by year's end, and questioned how that would affect the portfolio's overall trajectory.
- Taking Zytiga out of the picture, J&J's pharmaceutical unit would still have grown about 8%, "well above any market comparator," according to Joseph Wolk, the company's newly minted chief financial officer. "So the portfolio is strong. You look at the uptake of Tremfya, Stelara for Crohn's — our growth is coming from multiple sources, so while we're very pleased with Zytiga's performance we're not dependent upon it."
It didn't take long for Zytiga (abiraterone acetate) to become J&J's biggest oncology offering. Having come to market in 2011, it was roughly two years before the drug joined the blockbuster club and started outpacing Velcade (bortezomib). By the end of 2017, Zytiga was raking in just north of $2.5 billion annually.
The growth has been important for J&J, given that the company's neuroscience, infectious disease and metabolic disease units experienced modest declines over the past few years. It's unclear, however, how much longer the good times will last.
In January, a U.S. administrative court invalidated one of the key patents safeguarding Zytiga from generic competition. While J&J requested a rehearing, there remains a crowd of copycat drugmakers knocking at the door. Mylan, Actavis, Dr. Reddy’s, Sun Pharma and Teva Pharmaceuticals are just several of those looking to nullify the '438 patent covering Zytiga.
From J&J's end, executives acknowledged the threats but also the other assets that should keep the business growing should Zytiga generics arrive sooner than anticipated.
Recent product launches like Stelara (ustekinumab) in Crohn's disease and Darzalex (daratumumab) in multiple myeloma are two such examples.
What's more, J&J explained that the intricacies of its recent acquisition of Actelion are really starting to iron out — in turn providing a lift to revenue. During the second quarter, worldwide sales from the company's pulmonary arterial hypertension division were $665 million, up from $85 million from the same period in 2017.
"I think part of what we're seeing, frankly, is that now that we have several quarters under our belt, we're starting to see the global selling synergies" J&J CEO Alex Gorsky said on the earnings call.
"I've been particularly impressed with our medical affairs team and the way that we're looking at new opportunities — how do we identify patients earlier? How do we start combination therapy earlier to actually help potentially stop the progression of the disease? And combined with just general executional improvements that we see across the board, that's why it makes us bullish on Actelion going forward," he added.