Pharma company Johnson & Johnson beats profit expectations

The company employs 6,000 people across five counties in Ireland including in Cork. 

Profits at pharmaceutical company Johnson & Johnson (J&J) for the period from April to June beat Wall Street projections on the back of strong sales while the company cut its full-year forecast to account for a spate of recent acquisitions.

J&J has a sizable presence in Ireland employing 6,000 people across five counties including Cork. Up until last month, the company’s Irish subsidiaries were operating under the Janssen brand.

According to the company’s latest financial results, in the three months to the end of June, it posted revenue of $22.4bn (€20.5bn) which surpassed the consensus estimate of $22.3bn. Adjusted earnings of $2.82 per share beat analysts' expectations of $2.70 per share.

While drug sales were slightly ahead of estimates and medical device revenue fell a bit short, spending on research and development was below expectations.

J&J’s share price has fallen this year as investors fret about falling sales of Stelara, an anti-inflammatory medicine that will soon face lower-price competition in the US and Europe, and ongoing litigation with people who claim the company’s talc-based baby powder caused their cancers.

Chief Financial Officer Joe Wolk said in an interview: "I think we’re very well-positioned to manage that and to grow even in the first year of Stelara losing exclusivity". The shares fell 1.1% in trading before US markets opened.

The company said it would generate operational sales of $89.4bn in 2024, an increase of 6.4% from a year earlier, after its $13.1bn buyout of the device firm Shockwave Medical. J&J also bought Proteologix in June and the experimental eczema treatment NM26 from privately held Numab Therapeutics in July.

Because of those transactions, adjusted operational earnings for the year will be $10.05 a share, down from the $10.68 a share midpoint estimate it issued in April.

J&J also proposed settling the majority of the outstanding talc claims by paying out more than $6bn over 25 years. Plaintiffs have until July 26 to vote in favour of the deal, and J&J needs the support of at least 75% of claimants to move forward.

The company is “cautiously optimistic” the settlement will go through, Mr Wolk said.

J&J is counting on its medicines for cancer and autoimmune disease to make up for Stelara’s impending decline. Darzalex, a multiple myeloma treatment that’s now J&J’s biggest drug, beat analysts’ projections in the second quarter, as did the psoriasis treatment Tremfya and prostate cancer medicine Erleada.

Stelara sales rose 3.1% to $2.89bn, topping analysts' estimate of $2.77bn. Darzalex sales rose 18.4% to $2.88bn, in line with analysts' average estimate of $2.86bn.

Last year, J&J split from its consumer health division, which makes Tylenol and Listerine, to focus on the higher-margin pharmaceutical and medical-device businesses. The company, which has spent nearly $35 billion on acquisitions in the last 18 months, will be “opportunistic” in looking for deals to expand its pipeline, Mr Wolk said.

Last week, J&J announced that it was set to further expand in Cork with the purchase of the former Regatta distribution centre in Ringaskiddy, which closed last year after just 18 months in operation. The site is located next to J&J’s existing innovative medicine manufacturing facility, with the newly purchased property encompassing a 16.5-acre site, bringing the giant's total footprint in Ringaskiddy to 116.5-acres.

The site includes a 15,730 sqm industrial building and extensive parking facilities.

Bloomberg