JNJ vs. ABBV: Which Pharma Powerhouse Has Better Growth Prospects?

Core Viewpoint - Johnson & Johnson (JNJ) and AbbVie (ABBV) are both major U.S. pharmaceutical companies with strong pipelines and global operations, but they face different challenges and growth prospects as they approach 2025, which is expected to be a catalyst year for both companies [2]. Group 1: Johnson & Johnson (JNJ) - JNJ's diversified business model, operating through over 275 subsidiaries, provides resilience against economic cycles [3]. - The Innovative Medicine unit showed a 4.4% organic sales growth in Q1 2025 despite the loss of exclusivity for Stelara, with growth expected to be driven by key products and new drug launches [4][5]. - JNJ's MedTech business is experiencing challenges, particularly in China, due to the volume-based procurement program and competitive pressures [6]. - The loss of U.S. patent exclusivity for Stelara in 2025 led to a 33.7% decline in its sales in Q1 2025, with generics expected to further impact sales and profits [7]. - JNJ is facing over 62,000 lawsuits related to its talc-based products, which has created a negative sentiment around the stock [8][9]. - JNJ's 2025 sales and EPS estimates indicate a year-over-year increase of 2.7% and 6.2%, respectively, with the EPS estimate slightly rising over the past month [14]. - JNJ's stock has risen 8.1% year-to-date, outperforming the industry average of 2.4% [21]. - JNJ's current price/earnings ratio is 14.44, slightly below the industry average of 15.70, and its dividend yield is 3.2% [23][24]. - JNJ expects operational sales growth to accelerate in the second half of 2025, driven by new product launches [29]. Group 2: AbbVie (ABBV) - AbbVie has successfully managed the loss of exclusivity for Humira, launching new immunology drugs Skyrizi and Rinvoq, which are expected to generate over $31 billion in combined sales by 2027 [10]. - The oncology strategy is gaining traction with contributions from newer products, and AbbVie has several early/mid-stage pipeline candidates with blockbuster potential [11]. - AbbVie has been active in acquisitions, strengthening its pipeline in immunology and entering the obesity market through a licensing deal [12]. - AbbVie faces near-term challenges, including biosimilar erosion of Humira and competitive pressures on its cancer drug Imbruvica [13]. - AbbVie's 2025 sales and EPS estimates imply a year-over-year increase of 6.4% and 21.2%, respectively, with the EPS estimate slightly declining over the past month [17]. - AbbVie's stock has risen 12.4% year-to-date, also outperforming the industry average [21]. - AbbVie's current price/earnings ratio is 15.22, lower than the industry average but higher than its 5-year mean of 12.23, with a dividend yield of around 3.4% [23][24]. - AbbVie expects to achieve mid-single-digit revenue growth in 2025 and a high single-digit CAGR through 2029, with no significant loss of exclusivity events anticipated for the rest of the decade [31].