Key Takeaways J&J's Innovative Medicine sales rose 4.1% organically to $60.4B in 2025 despite Stelara's LOE.JNJ saw growth led by Darzalex, Tremfya and Erleada, with new drugs contributing.J&J Stelara's LOE cut segment growth by 1,110 bps, with biosimilars launching in 2025.Johnson & Johnson (JNJ) has one of the most diverse revenue streams in the industry within its pharmaceuticals division, called Innovative Medicine. The company has several multi-million-dollar drugs covering a broad range of areas such ...

Core Insights - Johnson & Johnson (J&J) announced a financial outlook for 2026, projecting sales between $100.0 billion and $101.0 billion, surpassing the Zacks Consensus Estimate of $98.5 billion, with adjusted earnings per share expected to be in the range of $11.43 to $11.63 [1][9] Group 1: Innovative Medicine Segment - J&J anticipates accelerated growth in the Innovative Medicine segment in 2026, despite the loss of exclusivity (LOE) for the blockbuster drug Stelara, which negatively impacted growth by 1040 basis points in 2025 [2][3] - Key products such as Darzalex, Tremfya, Spravato, Carvykti, and Erleada, along with new launches like Rybrevant and Caplyta, are expected to drive growth in 2026 [4][5] - The impact of generic competition is expected to increase in 2026 with the introduction of biosimilars for Stelara and generics for Simponi and Opsumit [3][4] Group 2: MedTech Segment - J&J's MedTech business showed improvement with sales rising 4.3% to $33.8 billion in 2025, and stronger growth is expected in 2026 due to increased adoption of new products across various portfolios [6][7] - The company anticipates some challenges from China's volume-based procurement (VBP) program, which is a government-driven cost containment effort [6][7] Group 3: Stock Performance and Valuation - J&J's stock has outperformed the industry, rising 47.3% over the past year compared to a 19.3% increase in the industry [8] - The company's shares are currently trading at a price/earnings ratio of 19.11, higher than the industry average of 18.33 and above its five-year mean of 15.65 [11] - The Zacks Consensus Estimate for 2026 earnings has increased from $11.46 to $11.53, reflecting a positive outlook following J&J's financial projections [13]

Core Insights - Johnson & Johnson reported a strong operational sales growth of 5.3% for full-year 2025, reaching $94.2 billion, with U.S. growth at 6.9% and international growth at 3.4% despite challenges from Stelara [1] - The company emphasized a strategic pivot towards higher-growth markets, including plans to separate its Orthopaedics business by mid-2027, and highlighted significant investments in R&D and M&A totaling over $32 billion in 2025 [4] - CEO Joaquin Duato described 2025 as a "catapult year" for accelerated growth, supported by a robust portfolio and pipeline, with expectations for continued growth and improving margins in 2026 [5] Financial Performance - For Q4 2025, net earnings were $5.1 billion, with diluted EPS of $2.10, up from $1.41 a year earlier; adjusted net earnings were $6.0 billion, with adjusted diluted EPS of $2.46, reflecting increases of 21.5% and 20.6% respectively compared to Q4 2024 [2] - Full-year net earnings reached $26.8 billion, with diluted EPS at $11.03, including a $7 billion talc reserve reversal; adjusted net earnings were $26.2 billion, with adjusted diluted EPS of $10.79, both up 8.1% from 2024 [6] Business Segments - In Innovative Medicine, Q4 worldwide sales were $15.8 billion, up 7.9% operationally, with both U.S. and international growth at 7.9%; acquisitions contributed 170 basis points, primarily from Intra-Cellular [7] - Oncology products showed strong performance, with Darzalex sales growing 24.1% in Q4 and over $14 billion in full-year sales; Carvykti generated $555 million in Q4 sales, up 63.2% [7] - MedTech sales in Q4 were $8.8 billion, up 5.8% operationally, driven by cardiovascular growth, including Abiomed and Shockwave [8] Margins and Guidance - Adjusted income before tax as a percentage of sales rose to 28.7% in Q4 from 24.1% a year earlier, with Innovative Medicine margin improving to 36.3% and MedTech margin to 17.4% [10] - For 2026, the company expects operational sales growth of 5.7% to 6.7%, with a midpoint of $100 billion; adjusted EPS guidance is set at $11.28 to $11.48, implying 5.5% growth at the midpoint [13][14] Pipeline and Future Outlook - Management highlighted anticipated regulatory events for 2026, including expected approvals for Icotide in psoriasis and Tecvayli in multiple myeloma [15] - The company is also focusing on its multiple myeloma portfolio, with positive early feedback on Inlexo for bladder cancer and plans for a permanent J-code [16]

Financial Data and Key Metrics Changes - In Q4 2025, worldwide sales reached $24.6 billion, a 7.1% increase despite a 650 basis point headwind from Stelara [17] - For the full year 2025, worldwide sales were $94.2 billion, reflecting a 5.3% increase, with U.S. growth at 6.9% and international growth at 3.4% [18] - Net earnings for Q4 were $5.1 billion, with diluted earnings per share at $2.10, compared to $1.41 a year ago [18] - Full year 2025 net earnings were $26.8 billion, with diluted earnings per share at $11.03, significantly up from $5.79 the previous year [19] Business Line Data and Key Metrics Changes - Innovative Medicine reported Q4 sales of $15.8 billion, a 7.9% increase, with notable growth in oncology and immunology [20] - In oncology, Darzalex grew 24.1%, while Carvykti achieved sales of $555 million with a growth of 63.2% [20] - Immunology saw Tremfya grow 65.4%, while Stelara declined 48.6% due to biosimilar competition [21] - MedTech sales for the year were $34 billion, with operational growth of 5.4%, driven by cardiovascular and surgical segments [13] Market Data and Key Metrics Changes - U.S. sales growth was 7.5% in Q4, while international sales grew by 6.6% [17] - The cardiovascular segment delivered 15% operational sales growth, with Abiomed and Shockwave showing strong performance [13] - Surgical vision grew 10.8%, driven by new product innovations and demand for premium intraocular lenses [24] Company Strategy and Development Direction - The company plans to separate its orthopedics business by mid-2027, focusing on high-growth areas [30] - Investments of over $32 billion in R&D and M&A were made in 2025, including acquisitions of Intra-Cellular Therapies and HALDA Therapeutics [6] - The company aims for double-digit growth by the end of the decade, supported by a strong portfolio and pipeline [5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving faster growth in 2026 compared to 2025, with a line of sight to double-digit growth [6] - The company anticipates operational sales growth in 2026 to be between 5.7% and 6.7%, with a midpoint of $100 billion [31] - Management highlighted the strength of their portfolio and pipeline as key drivers for future growth [41] Other Important Information - The company ended 2025 with approximately $20 billion in cash and marketable securities, and $48 billion in debt [30] - A net interest expense of $300 million to $400 million is expected for 2026 [33] - The effective tax rate is projected to be between 17.5% and 18.5% for 2026 [34] Q&A Session Summary Question: Overview of growth prospects and key levers for double-digit growth - Management highlighted the strength of the portfolio and pipeline, focusing on oncology, immunology, and MedTech as key growth areas [40][41] Question: MedTech market dynamics and growth expectations - Management does not expect the loss of ACA subsidies to materially impact MedTech performance, with a focus on clinical capacity driving growth [48] Question: Margin progression and relationship to top-line growth - Management indicated that margin improvements will align with sales growth, with expectations for at least 50 basis points of improvement in 2026 [55] Question: Vision care market health and performance - Management noted strong underlying demand in the contact lens category, with robust growth driven by new product launches [58][59]

Johnson & Johnson (NYSE: JNJ) FY Conference Summary Company Overview - **Company**: Johnson & Johnson (J&J) - **Date of Conference**: January 12, 2026 - **Speaker**: Joaquin Duato, Chairman and CEO Key Points Company Performance and Growth Outlook - J&J experienced significant outperformance in 2025, with expectations for continued growth in 2026, projecting double-digit growth later in the decade [4][8] - The company is on track to become the largest healthcare company with over $100 billion in sales [4] - The innovative medicine group, excluding Stelara, grew by 16% in Q3, highlighting strong fundamentals [4] Strategic Focus Areas - J&J is focused on six key areas: - **Innovative Medicine**: Oncology, Immunology, Neuroscience - **Medical Technology**: Cardiovascular, Surgery, Vision [4] - The company plans to launch approximately a dozen new products, including Icotrokinra and a new coronary catheter in 2026 [5][6] Pipeline and Product Development - Recent advancements include the filing of Ottava, a robotic soft tissue surgical system, and the acquisition of Halda, a precision oncology platform [7] - The company aims to invest $55 billion in R&D, technology, and manufacturing in the U.S. to enhance local production of advanced medicines [10] Industry Policy Environment - J&J has reached agreements with the government to open access and lower prices for medicines, which is expected to positively impact the company and the industry [9][10] - The agreements also include exemptions on pharmaceutical tariffs, alleviating previous policy overhangs [9] Financial Position - J&J maintains a strong financial position with a triple-A rated balance sheet and robust cash flow, allowing for simultaneous investment and shareholder returns [7][8] Growth Drivers in Pharmaceuticals - **Oncology**: Targeting $50 billion in sales by 2030, with strong products like Darzalex and Rybrevant [14][18] - **Immunology**: Tremfya is expected to exceed $10 billion in sales, with Icotrokinra set to expand market access as the first oral IL-23 blocker [16][26] - **Neuroscience**: Spravato and Caplyta are highlighted as significant growth drivers, with Caplyta projected to exceed $5 billion [36] MedTech Business Strategy - J&J is focusing on high-growth areas in MedTech, particularly in cardiology, surgery, and vision, with plans to separate the orthopedics franchise to enhance growth and margins [39][46] - Key priorities include advancing cardiac ablation technologies and establishing a strong presence in robotic surgery with Ottava and Monarch [41][44] Future Milestones - Anticipated approvals in 2026 include Ottava for robotic surgery and new products in cardiology and surgery [49] - The robotic platform is expected to contribute significantly to growth from 2028 onwards [50] Business Development Strategy - J&J will continue to focus on early-stage deals for portfolio expansion, with a strong emphasis on identifying transformative technologies [52][53] Conclusion - J&J is entering a cycle of accelerated growth with multiple drivers, projecting a better performance in 2026 compared to 2025, and aiming for double-digit growth by the end of the decade [54]

Core Insights - Johnson & Johnson (JNJ) is recognized as one of the 14 Best Dividend Growth Stocks to buy and hold in 2026 [1] - Barclays has raised its price target for JNJ from $197 to $217, citing strong sales from key drugs like Darzalex, Tremfya, and Simponi, which may exceed Q4 consensus estimates [2] - The company has invested $10.4 billion in research and development (R&D) through Q3, positioning itself as a leading innovator globally, while also maintaining strong free cash flow [3] Financial Performance - JNJ's R&D investment of $10.4 billion supports its ongoing revenue and earnings growth, allowing for continued dividend increases, currently yielding approximately 2.5% [3] - The recent acquisition of Halda Therapeutics for $3.1 billion is expected to enhance JNJ's capabilities in cancer treatment [3] Oncology Sector - Oncology is a significant area for JNJ, with key products like Rybrevant and Lazcluze targeting advanced non-small cell lung cancer, and Inlexzo expected to contribute to the oncology portfolio [4]

Core Insights - Amgen has acquired Dark Blue Therapeutics for approximately $840 million, enhancing its oncology pipeline [1][8] - The acquisition adds a preclinical small-molecule degrader targeting MLLT1/3 proteins associated with specific types of acute myeloid leukemia (AML) [2][8] - Amgen currently does not market any therapies for AML but has Blincyto approved for acute lymphoblastic leukemia (ALL) and is developing bispecific T-cell engagers for AML [3][8] Amgen's Oncology Pipeline - Amgen has a diverse oncology portfolio, including drugs like Blincyto, Imdelltra, Lumakras, Vectibix, Kyprolis, Nplate, and Xgeva [6] - Key candidates in its late-stage oncology pipeline include bemarituzumab for gastric cancer and xaluritamig for metastatic castrate-resistant prostate cancer [6] - Ongoing phase III studies are evaluating Imdelltra in small cell lung cancer and biosimilars for Opdivo, Keytruda, and Ocrevus [6] Competitive Landscape - Major competitors in the oncology space include Pfizer, AstraZeneca, Merck, Johnson & Johnson, and Bristol-Myers [9] - Pfizer's oncology sales account for about 28% of total revenues, with a 7% increase in the first nine months of 2025 [10] - AstraZeneca's oncology segment comprises around 43% of total revenues, with a 16% increase in sales during the same period [11] - Merck's Keytruda, a key oncology drug, generated $23.3 billion in sales in the first nine months of 2025, up 8% year over year [12] - Bristol-Myers' Opdivo accounts for approximately 20% of its total revenues, with sales rising 8% to $7.54 billion [13] - Johnson & Johnson's oncology sales represent around 27% of total revenues, with a 20.6% operational increase in the first nine months of 2025 [14]

Core Insights - Johnson & Johnson (JNJ) and AstraZeneca (AZN) are among the largest pharmaceutical companies globally, with diverse healthcare portfolios and strong oncology segments [1][2] - JNJ's diversified business model includes pharmaceuticals and medical devices, while AZN focuses heavily on oncology sales, which account for approximately 43% of its total revenues [2][12] - Both companies face challenges such as patent expirations and the redesign of Medicare Part D, impacting their growth prospects [2][10] Johnson & Johnson (JNJ) - JNJ's strength lies in its diversified business model, operating through over 275 subsidiaries, which reduces reliance on any single drug [3] - The Innovative Medicine unit reported a 3.4% organic sales growth in the first nine months of 2025, driven by key drugs like Darzalex and new launches [4] - JNJ's MedTech business has shown improvement, particularly from acquired cardiovascular businesses and advancements in electrophysiology [5] - The potential separation of its Orthopaedics franchise into a standalone company, DePuy Synthes, is expected to enhance growth and margins in the MedTech unit [6] - JNJ anticipates accelerated growth in both Innovative Medicine and MedTech segments in 2026 [8] - The company has made significant advancements in its pipeline, gaining approvals for new products that could drive future growth [9] - JNJ's diversified model supports steady growth, with 2025 gains attributed to Innovative Medicine and improving MedTech performance [10] - JNJ estimates that 10 new products could achieve peak sales of $5 billion, despite facing challenges like the Stelara patent cliff and ongoing talc lawsuits [11] AstraZeneca (AZN) - AZN has several blockbuster drugs exceeding $1 billion in sales, contributing to its revenue growth, with new products offsetting losses from mature brands [12][13] - The company aims for industry-leading top-line growth, projecting total revenues of $80 billion by 2030, with plans to launch 20 new medicines [14] - AZN faces challenges from the redesign of Medicare Part D affecting U.S. oncology sales and competition from generics and biosimilars [15] - The company expects fourth-quarter revenues to be impacted by VBP-related costs and budget constraints in China [16] Financial Estimates and Performance - The Zacks Consensus Estimate for JNJ's 2026 sales and EPS indicates year-over-year increases of 4.97% and 5.74%, respectively [17] - In contrast, AZN's 2026 sales and EPS estimates imply increases of 6.02% and 12.23% [19] - JNJ's stock has risen 39.8% over the past year, while AZN's stock has increased by 36.9%, outperforming the industry average of 18.8% [21] - JNJ's current price/earnings ratio is 17.76, slightly higher than AZN's 17.65, with both companies trading above industry averages [23] - JNJ offers a dividend yield of 2.6%, compared to AZN's 1.1% [25] Investment Considerations - Both JNJ and AZN have shown strong performance in 2025 and are optimistic about growth in 2026, with both stocks rated as Zacks Rank 3 (Hold) [26] - JNJ's consistent revenue and EPS growth, along with strong cash flows and a history of dividend increases, positions it favorably despite facing headwinds [27][28]

Core Insights - Pfizer anticipates a significant revenue decline due to the loss of exclusivity for key products between 2026 and 2030, including Eliquis, Vyndaqel, Ibrance, Xeljanz, and Xtandi, all facing patent expirations [1][9] - The company has bolstered its R&D pipeline through mergers and acquisitions, successful data readouts, and pivotal program initiations, positioning itself for sustainable growth post-LOE [1][7] Oncology Pipeline - Pfizer has advanced its oncology pipeline with several candidates in late-stage development, including vepdegestrant for ER+/HER2- metastatic breast cancer, atirmociclib for HR+/HER2- metastatic breast cancer, and sigvotatug vedotin for metastatic non-small cell lung cancer [2] - By 2030, Pfizer expects to have eight or more blockbuster oncology medicines in its portfolio [4] Non-Oncology Developments - In non-oncology areas, Pfizer is developing an mRNA flu/COVID combination vaccine and osivelotor for sickle cell disease, both in late-stage development [4] - The company is also expanding the labels of approved products like Padcev, which was recently approved by the FDA in combination with Merck's Keytruda for specific bladder cancer patients [5] Obesity Market Expansion - Pfizer is strengthening its presence in the obesity market, currently dominated by Eli Lilly and Novo Nordisk, through the $10 billion acquisition of Metsera and the in-licensing of YP05002, an oral GLP-1 receptor agonist [6] - The Metsera acquisition added four novel clinical-stage programs for obesity, expected to generate billions in peak sales [6] Competitive Landscape - Pfizer faces revenue headwinds from patent expirations but is positioned for long-term growth through its expanding late-stage pipeline in oncology and investments in obesity, vaccines, and rare diseases [7] - The oncology market is competitive, with major players like AstraZeneca, Merck, Johnson & Johnson, and Bristol-Myers also focusing on oncology sales [10][11][12][13] Financial Performance - Pfizer's stock has declined 7% over the past year, while the industry has seen a 16% increase [14] - The company's shares are trading at a forward price/earnings ratio of 8.18, below the industry average of 17.40 and its own 5-year mean of 10.39, indicating attractive valuation [16] - The Zacks Consensus Estimate for 2025 earnings has increased slightly to $3.10 per share, while the estimate for 2026 has decreased to $3.04 per share [18]

Core Insights - The Meridian Hedged Equity Fund reported a return of 1.67% in Q3 2025, underperforming the S&P 500 Index which returned 8.13% and the CBOE S&P 500 BuyWrite Index which returned 3.53% [1] Company Overview - Johnson & Johnson (NYSE: JNJ) is a major player in the healthcare sector, focusing on innovative pharmaceuticals and medical devices [3] - The company has a market capitalization of $495.785 billion, with its stock closing at $205.78 per share on December 23, 2025 [2] Performance Metrics - Johnson & Johnson's stock experienced a one-month return of -0.43% but gained 41.09% over the last 52 weeks [2] Strategic Developments - Johnson & Johnson is facing a critical transition as sales from its blockbuster drug Stelara decline due to patent expiration, but it is countering this with a strong pipeline of new drugs, particularly in oncology and immunology [3] - The company secured FDA approval for Inlexzo, a new bladder cancer treatment, and its lung cancer drug Rybrevant is moving closer to broader adoption following positive trial data [3] - Strong sales momentum from other key drugs has compensated for the decline in Stelara, and favorable legal developments have eased concerns regarding ongoing talc litigation [3] Investment Sentiment - Johnson & Johnson was held by 103 hedge fund portfolios at the end of Q3 2025, an increase from 95 in the previous quarter [4] - Despite its potential, some analysts believe that certain AI stocks may offer greater upside potential and less downside risk compared to Johnson & Johnson [4]