J&J Expects Innovative Medicines Growth Despite Stelara LOE: Here's Why

Core Insights - Johnson & Johnson's (JNJ) immunology drug Stelara lost patent exclusivity in the U.S. in 2025, significantly impacting sales and profits [1][3] - Several biosimilar versions of Stelara have been launched, leading to a substantial decline in its sales [2][3] - Despite the loss of exclusivity, J&J anticipates growth in its Innovative Medicine segment driven by other key products and new drugs [5][6] Sales Impact - Stelara sales dropped by 42.7% in Q2 2025, negatively affecting the Innovative Medicine segment's growth by 1170 basis points [3][11] - Sales of Stelara are projected to decrease from nearly $11 billion in 2023 to approximately $2.7 billion by 2027 [4] Future Growth Expectations - J&J expects to generate over $57 billion in sales from the Innovative Medicines segment in 2025, maintaining levels similar to 2024 despite Stelara's loss of exclusivity [6][11] - Key products like Darzalex, Tremfya, Spravato, and Erleada are driving double-digit sales growth, with Tremfya expected to become a $10 billion product [7][11] Competitive Landscape - J&J operates in the immunology and oncology sectors, facing competition from major players like AbbVie, Amgen, Novartis, and AstraZeneca [9] Stock Performance and Valuation - J&J's stock has outperformed the industry, rising 22.6% year-to-date compared to a breakeven performance for the industry [10] - The company's shares are trading at a price/earnings ratio of 15.78, slightly above the industry average of 14.78 [12] Earnings Estimates - The Zacks Consensus Estimate for J&J's 2025 earnings has increased from $10.83 to $10.86 per share over the past 60 days [13]