Johnson & Johnson (NYSE: JNJ) shares fell about 1 percent in early Wednesday trading as investors digested the company’s latest earnings report.
Management highlighted confidence in the business, with CEO Joaquin Duato calling the company’s lineup the strongest it has ever had. The market response suggested lingering doubts. Concerns remain around patent losses, litigation exposure, and several drugs that missed sales expectations in the fourth quarter.
Stelara Decline Weighs on Outlook
The biggest overhang continues to be Stelara. The autoimmune drug generated more than $10 billion in sales in 2024 but is now firmly in decline following the loss of U.S. patent protection in 2023.
In the fourth quarter, U.S. Stelara revenue fell 55 percent to $766 million. Global sales dropped 48 percent to $1.23 billion. The sharp slowdown underscores how exposed J&J is to the broader patent cliff facing the pharmaceutical sector.
Darzalex Still Growing but Clock Is Ticking
Not all of J&J’s major products are slowing. Cancer drug Darzalex delivered $14.4 billion in sales last year, with revenue rising 23 percent.
However, its U.S. patent expires in 2029, putting another major franchise on a countdown. Investors remain focused on whether newer assets can offset that eventual decline.
Acquisitions Fill the Pipeline Gap
To manage these risks, J&J has leaned heavily on acquisitions. The company agreed to pay nearly $15 billion for Intra-Cellular Therapies, gaining access to a fast-growing psychiatric drug. It also spent $3 billion to acquire oncology startup Halda Therapeutics.
In 2024, J&J paid $1.25 billion for Yellow Jersey Therapeutics. That deal has already lost some shine after its lead eczema drug failed a key trial late last year.
Oncology Is the Core Growth Bet
Cancer remains the company’s top strategic focus. Duato told analysts that J&J aims to become the leading oncology company globally, with $50 billion in oncology revenue by the end of the decade.
Progress is visible but uneven. Carvykti, a cell therapy for multiple myeloma, posted a 66 percent jump in fourth quarter sales to $555 million. That figure still came in below Wall Street forecasts.
Tecvayli, another multiple myeloma treatment, grew sales 21 percent to $176 million in the quarter but also missed expectations.
Immunology and Autoimmune Pipeline
Beyond cancer, J&J continues to invest in immunology. A partnership with Protagonist Therapeutics has produced an oral psoriasis drug nearing regulatory review. Management believes the drug could become a major commercial product and expand into other autoimmune conditions.
Political and Cost Pressures Remain
Like peers, J&J is navigating growing political risk. Earlier this month, the company reached a drug pricing agreement with the White House amid tariff pressure from President Trump.
Even with that deal in place, J&J expects tariff-related costs to rise sharply. According to the Wall Street Journal, those costs could exceed $500 million in 2026, more than double current levels.
