Earnings preview johnson and johnson
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What You Need To Know About Johnson & Johnson’s Top Selling Drugs
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Johnson’s Q2 revenue
– Second quarter sales totaled $19.5 billion, up 9.1%.• First quarter sales were $18.1 billion, up 3.5% from last year.
– Pharma sales account for 44% of sales, up from 41% in Q1.• Drug sales are driving Johnson’s revenue growth.
Johnson & Johnson’s revenue is accelerating.
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Pharma is driving Johnson’s growth
• Drug product sales jumped 21% year-over-year to $8.5 billion in Q2.• An acceleration from the
10% YoY growth in Q1.• U.S. pharma sales surged
36.6% from a year ago.• International sales were
up 6.9%.
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Pharma is driving Johnson’s growth• Infectious disease revenue jumped 81.6% from last year.
• An acceleration from the 47% YoY growth in Q1.• Oncology sales were up 25.5% from a year ago.
• A deceleration from the 28.7% YoY growth in Q1.• Immunology revenue grew 17.4% in the past year.
• An acceleration from the 6.3% YoY growth in Q1.
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Infectious disease
Revenue rose 81.6% year-over-year to $1.762 billion in the second quarter.1. Edurant (HIV) sales jumped 64.3% to $92 million.
• A deceleration in growth of 88% in Q1.• Up from $81 million in Q1.• Marketplace enrollment and Medicaid expansion are driving access to HIV drugs.
2. Prezista (HIV) sales rose 13.1% to $492 million.• A deceleration from 21% YoY growth in Q1.• Up from to $445 million in Q1.
3. Olysio (hepatitis C) sales totaled $831 million.• Up significantly from sales of $354 million in Q1.• Only $106 million in Q2 sales from overseas.• The majority of Olysio’s sales are for use alongside Gilead’s Sovaldi.
• May indicate ongoing Sovaldi sales growth.• Olysio may lose share if the FDA approves competing drugs from AbbVie and Bristol-
Myers.
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Infectious disease continued
2 drivers supporting revenue growth:1. The ACA supports HIV adherence rates, pricing, and volume growth.
• HIV was the biggest category for drug claims in exchange plans during Q1, representing 55% of all specialty drug claims, far more than the 21% rate for non-exchange
2. Unleashing demand for hepatitis C treatment.• Doctors held off on treatment ahead of approval for Olysio and Gilead’s Sovaldi.
• Oral treatment rather than injection therapy.• Shorter treatment periods.• Less reliance on side effect laden peg interferon and ribavirin.
Source: Express Scripts
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OncologyRevenue rose 25.5% year-over-year to $1.11 billion in Q2.
1. Zytiga (prostate cancer) sales grew 42.3% to $562 million.• Down from growth of 48.8% in Q1.• Up from to $512 million in Q1.
• Medivation and Astellas’ Xtandi likely to receive a label expansion to include the pre-chemo indication threatening Zytiga market share.
2. Velcade (MCL and multiple myeloma) sales increased by 6.3% to $403 million.• Down from growth of 15.6% in Q1.• Down from $408 million in Q1.
3. Imbruvica (MCL and CLL) sales are still not broken out.• Developed with Pharmacyclics.• Shows up in “other oncology” revenue line.• Other oncology revenue up 30.6% to $146 million in Q2.
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Oncology continuedAn aging population and new targeted therapies are driving cancer spending higher.
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ImmunologyRevenue rose 17.4% to $2.63 billion in the second quarter.
1. Stelara (psoriasis/psoriatic arthritis) sales up 42.3% to $528 million.• Acceleration from growth of 31.8% in Q1.• Up from $456 million in Q1.• Facing a new competitor in Celgene’s Otezla.
2. Simponi (rheumatoid arthritis/psoriatic arthritis) sales up 61% to $282 million.• Acceleration from 9.3% YoY growth in Q1.• Up from $259 million in the first quarter.
• Comparison’s become tougher as approvals are annualized.
3. Remicade (rheumatoid arthritis) sales up 7.9% to $1.8 billion.• Acceleration from 0.6% growth in Q1.• Up from $1.61 billion in the first quarter.• Threat from biosimilars looms.
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Immunology continuedImmunology treatment spending is expected to climb,
helping offset risks to Remicade from biosimilars.
• Rising prevalence of rheumatoid arthritis and psoriasis.• Biologics carry higher prices and offer longer patent protection.• No clear pathway to approval in the U.S. for biosimilars.
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Other drugs of interest
Xarelto– Factor Xa drug approved as an anticoagulant alternative to the widely used warfarin.– Competes against Boehringer’s Pradaxa and Bristol-Myers & Pfizer’s Eliquis.– Xarelto sales grew 91% to $361 million in Q2.
• Up from $319 million in Q1. Invokana– The first SGLT2 inhibitor approved for type 2 diabetes in March 2013.– J&J doesn't break out sales of Invokana
• Contributed 2.5% to U.S. pharma growth rate.• Market share in non-insulin/metformin scripts of 2.3%, up from 1.8% in Q1.• Most successful diabetes launch since Merck’s Januvia, according to management.• AstraZeneca’s SGLT2 drug Farxiga hasn’t derailed Invokana.
2 more intriguing drugs posting significant growth in Q2.
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Earnings impact•Johnson has beat analyst expectations in each of the past four quarters.
•Operating margin continues to improve, supporting future dividend pay-outs.
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Fool-worthy thoughts•Year-over-year growth accelerated thanks to new drug launches.•Olysio is a major contributor to growth; however, AbbVie and Bristol-Myers looming drugs could impact its use alongside Sovaldi.
• AbbVie’s NDA was submitted in April.• Bristol-Myers NDA was submitted in April.
•An approval in pre-chemo mCRPC for Medivation and Astellas’ Xtandi could hurt Zytiga sales by year end.
• Xtandi label expansion PDUFA date is September 18th.
•Xarelto sales continue to climb and could benefit if Portola’s factor Xa antidote succeeds in phase 3 trials.
• Enrollment began in May 2014.
•Invokana traction continues, but other SGLT2 diabetes drugs are coming from competitors.
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.Crush non-dividend paying counterparts over
the long term.