Q1 2024 Summary
Published Jan 10, 2025, 5:10 PM UTC- Strong growth in Innovative Medicines, with key brands like DARZALEX, TREMFYA, and ERLEADA all growing over 20%, and new product launches such as SPRAVATO achieving over 70% growth and CARVYKTI over 100% growth vs Q1 2023, indicating robust demand and pipeline success. , ,
- Robust performance in the MedTech segment, particularly in the electrophysiology business delivering over 20% growth, nearing $5 billion in size, with confidence in maintaining leadership through new product launches and expanded portfolios. , ,
- Significant growth in the Multiple Myeloma franchise, with CARVYKTI receiving FDA approval for the second-line setting, doubling manufacturing capacity since early 2023, and anticipating continued growth in the second half; TECVAYLI's launch going very well worldwide, strengthening the company's position in oncology.
- MedTech growth may not be sustainable due to one-time items: The MedTech business grew 6.5% on an adjusted operational basis in Q1, but this included one-time benefits such as distributor inventory stocking issues and a revenue recognition change impacting Orthopaedics by about 300 basis points. Without these, underlying growth may be lower.
- Potential legal risks impacting INVEGA SUSTENNA/XEPLION patents: Ongoing litigation concerning INVEGA SUSTENNA/XEPLION patents poses a risk. Although management remains confident, the case has been remanded to the New Jersey District Court, and the final outcome is uncertain.
- Anticipated slowdown in growth of Pulmonary Hypertension products: Strong Q1 growth in pulmonary hypertension products OPSUMIT and UPTRAVI was driven by favorable patient mix, which is not expected to continue beyond Q1 2024. Additionally, the introduction of Merck's WINREVAIR could disrupt the market and impact future growth.
-
Multiple Myeloma Products
Q: How are CARVYKTI, TECVAYLI, and TALVEY performing and what's the outlook?
A: Our multiple myeloma portfolio is showing strong growth, with CARVYKTI sales doubling versus Q1 2023 due to very strong demand. We have doubled manufacturing capacity since early 2023 to meet this demand. TECVAYLI is launching well globally with strong uptake in key markets. TALVEY is also showing very strong uptake as the first and only GPRC5D bispecific. We are optimistic about continued growth in these franchises. -
MedTech Growth and One-time Items
Q: What's the net impact of one-time items on MedTech growth?
A: Our MedTech business grew 6.3% adjusted operationally in Q1. There were both tailwinds and headwinds from one-time items, but overall, the 6.3% growth is a true number. We had 80 basis points impact from fewer selling days and 300 basis points impact from a revenue recognition change in Orthopaedics. We remain confident in achieving high single-digit growth for 2024. -
Business Development Strategy
Q: What's your appetite for further acquisitions after Shockwave?
A: Our M&A strategy remains consistent and disciplined. With our strong cash flow and balance sheet, we have significant flexibility to consider multiple types of transactions. We will continue to evaluate opportunities agnostic to sector and size, focusing on technologies that improve standard of care, align with our capabilities, enable entry into high-growth markets, and deliver compelling financial results. -
INVEGA SUSTENNA Litigation Impact
Q: What's the potential impact of the INVEGA SUSTENNA litigation?
A: We remain confident in the strength of our INVEGA SUSTENNA patents and will continue to defend them. The recent Federal Circuit decision did not invalidate our patent but remanded the case back to the original court that ruled in our favor. We won't speculate on the litigation outcome, but our LAI portfolio continues to perform well. -
Electrophysiology Growth
Q: Can you discuss the strong growth in electrophysiology?
A: Our electrophysiology business grew over 20%, reaching nearly $5 billion. Growth was strong both in the U.S. and internationally. We are building on our leadership position with progress in Pulse Field Ablation (PFA), expecting FDA approval by late this year or early next. -
Orthopaedics Outlook
Q: What's the outlook for Orthopaedics growth?
A: We saw high single-digit growth in hips and knees, driven by our VELYS platform. We expect this strong performance to continue, with high single-digit growth in these categories going forward. We're also improving our margin profile by simplifying our portfolio. -
Vision Care Performance
Q: What's affecting the Vision Care business, and what's the outlook?
A: The Q1 performance was impacted by distributor inventory adjustments in contact lenses. With supply stabilizing, we expect high single-digit growth for Vision Care in 2024. Our premium ACUVUE OASYS 1-Day family is performing well, and we are expanding our IOL portfolio. -
Pulmonary Hypertension Portfolio
Q: How is the Pulmonary Hypertension business performing, and what's the impact of new competition?
A: Both OPSUMIT and UPTRAVI delivered strong growth with volume and share gains. We recently received approval for OPSYNVI, a combination tablet that aligns with guidelines. Despite new competition, we believe our portfolio will continue to perform well. -
SPRAVATO Growth and IRA Negotiations
Q: Can you comment on SPRAVATO's growth and IRA negotiations?
A: SPRAVATO continues to show strong uptake, with over 70% growth in the quarter. We remain confident in its outlook as we expand into more markets. Regarding the IRA, we are engaging appropriately with the government but believe the drug pricing provisions are damaging to healthcare innovation. However, our growth drivers remain robust, and we are confident in achieving our financial commitments.