Q4 2024 Earnings Summary
- Johnson & Johnson's multiple myeloma franchise is demonstrating exceptional growth, with DARZALEX achieving $3.1 billion in quarterly sales (22% growth), making it the company's first brand to surpass $3 billion in quarterly sales. CARVYKTI is nearing $1 billion in annual sales, reflecting strong demand and capacity expansion. The company is advancing these therapies into earlier lines of treatment, which may drive future growth.
- Despite biosimilar competition for STELARA, Johnson & Johnson's immunology portfolio remains strong, with TREMFYA showing significant growth and differentiation, particularly in inflammatory bowel disease. The successful launch in ulcerative colitis and the upcoming launch in Crohn's disease are expected to support continued growth in this segment.
- Johnson & Johnson maintains confidence in its global market leadership in electrophysiology, with a $5 billion business that grew 14% in 2024. Despite short-term headwinds, the company is expanding its product portfolio, including the successful international launch of VARIPULSE, positioning it to capitalize on the growing electrophysiology market.
- Johnson & Johnson is facing significant headwinds due to biosimilar competition for STELARA, which could lead to substantial erosion in sales and may not be fully offset by other products like TREMFYA.
- A temporary pause of all U.S. VARIPULSE cases due to investigation of neurovascular events introduces uncertainty and may negatively impact growth in their electrophysiology business, especially given competitive pressures in the U.S. market.
- Continued headwinds in China and near-term competitive pressures in the U.S. electrophysiology market could negatively impact Johnson & Johnson's MedTech growth in 2025.
| Metric | YoY Change | Reason |
|---|---|---|
Total Revenue | +66% | The steep increase was driven by acquisitions (e.g., Abiomed and Shockwave, contributing to strong MedTech expansion), robust U.S. oncology growth (e.g., CARVYKTI and DARZALEX), and continued post-COVID recovery of procedures, especially in MedTech. Additionally, the divestiture of consumer health operations (Kenvue) in prior periods simplified the revenue base, accentuating percentage growth. |
MedTech | +7% | Growth in MedTech was propelled by Cardiovascular (+23%) and Vision products, offset partly by lower surgical volumes in regions facing macroeconomic challenges (e.g., China’s volume-based procurement). The Abiomed integration and further acquisitions contributed to robust top-line gains, despite commodity inflation and restructuring costs. |
Oncology | +19% | The segment benefited from strong performance of flagship therapies (e.g., DARZALEX), accelerating adoption of CARVYKTI (+193%), and pipeline expansions (e.g., TECVAYLI). These gains more than offset competitive pressures on legacy products like IMBRUVICA. Ongoing manufacturing capacity improvements also supported higher CARVYKTI supply and demand. |
Immunology | -8% | Declines stemmed from biosimilar competition for STELARA in Europe and continued erosion of REMICADE. Meanwhile, SIMPONI sales spiked (+1043%) due to changes in distribution rights and localized market dynamics. Overall, the loss of exclusivities and unfavorable patient mix outweighed the growth in TREMFYA. |
United States | +55% | The U.S. surge reflects solid gains in Innovative Medicine (Oncology and Immunology) alongside MedTech momentum from procedure recovery and acquisitions (e.g., Abiomed). Excluding discontinued Consumer Health results magnified the YoY growth rate. Favorable price actions and new product launches also contributed to strong domestic performance. |
Europe | +42% | Growth was supported by strong oncology sales (DARZALEX, CARVYKTI) and MedTech product uptake. Currency tailwinds (+1%), along with reduced COVID-19 vaccine drag compared to prior periods, boosted reported numbers. However, biosimilar competition (e.g., STELARA) and ongoing macroeconomic pressures partially constrained operational gains. |
Asia-Pacific, Africa | +116% | The region’s extraordinary growth rate reflects rebounding demand post-pandemic, capacity expansions (notably in cell therapies), and a low prior-year base. Nonetheless, China’s volume-based procurement program and currency headwinds tempered some gains, and the company adopted a conservative outlook for the remainder of the year. |
| Metric | Period | Previous Guidance | Current Guidance | Change |
|---|---|---|---|---|
Adjusted Operational EPS | FY 2024 | no prior guidance | $9.91 at midpoint | no prior guidance |
Reported Adjusted EPS | FY 2024 | no prior guidance | $9.93 at midpoint | no prior guidance |
Sales Growth (ex-acquisitions) | FY 2024 | no prior guidance | 5.7% to 6.2% | no prior guidance |
Sales Growth (operational) | FY 2024 | no prior guidance | 6.3% to 6.8% | no prior guidance |
Sales Growth (reported) | FY 2024 | no prior guidance | 5.1% to 5.6% | no prior guidance |
Adjusted Pre-Tax Operating Margin | FY 2024 | no prior guidance | Decline of 200 bps | no prior guidance |
Net Interest Income | FY 2024 | no prior guidance | $450M to $550M | no prior guidance |
Other Income | FY 2024 | no prior guidance | $1.9B to $2.1B | no prior guidance |
Effective Tax Rate | FY 2024 | no prior guidance | 17.5% to 18.5% | no prior guidance |
MedTech Sales Growth | FY 2024 | no prior guidance | 5% | no prior guidance |
Sales Growth | FY 2025 | no prior guidance | $89.6B (≈1% growth) | no prior guidance |
Adjusted Pre-Tax Operating Margin | FY 2025 | no prior guidance | Increase of 300 bps | no prior guidance |
Net Other Income | FY 2025 | no prior guidance | $900M to $1.1B | no prior guidance |
Net Interest Income | FY 2025 | no prior guidance | $0 to $100M | no prior guidance |
Effective Tax Rate | FY 2025 | no prior guidance | 16.5% to 17.0% | no prior guidance |
Adjusted Operational EPS | FY 2025 | no prior guidance | $10.75 to $10.95 (8.7% growth) | no prior guidance |
Reported Adjusted EPS | FY 2025 | no prior guidance | $10.60 (includes $0.25 FX impact) | no prior guidance |
Innovative Medicine Growth | FY 2025 | no prior guidance | Growth expected; $2B negative from Part D redesign | no prior guidance |
MedTech Growth | FY 2025 | no prior guidance | Growth from acquisitions; China remains a headwind | no prior guidance |
| Metric | Period | Guidance | Actual | Performance |
|---|---|---|---|---|
Sales (Reported) | FY 2024 | 5.1% to 5.6% year-over-year growth (midpoint of $88.6B) | Summed quarterly revenue of $88.821B(≈5.3% YoY) | Met |
| Topic | Previous Mentions | Current Period | Trend |
|---|---|---|---|
Multiple Myeloma Therapies | Consistently discussed from Q1 to Q3 with strong growth for DARZALEX, CARVYKTI capacity expansions, TECVAYLI launches, and TALVEY rollout | DARZALEX surpassed $3B, CARVYKTI nearly $1B, TECVAYLI at $146M, TALVEY launch ongoing | Continued strong growth; portfolio expansion driving bullish sentiment |
Immunology (STELARA, TREMFYA) & Biosimilar Competition | Repeatedly noted from Q1 to Q3, with STELARA’s LOE concerns and TREMFYA’s strong uptake in psoriasis and psoriatic arthritis | STELARA sales declined 13.6% (Q4) due to biosimilar impact; TREMFYA up 5.6% on new IBD indications | STELARA caution on biosimilars; TREMFYA bullish with new indications |
Electrophysiology (VARIPULSE, PFA, Market Leadership) | Mentioned Q1 to Q3 with PFA launches, Carto mapping leadership, global share gains | Short-term pause on U.S. VARIPULSE cases after neurovascular events; ex-U.S. rollout continues, 3000 cases completed | New U.S. headwind, but global optimism remains high |
China Headwinds (VBP, Anticorruption) | Discussed especially from Q2 to Q3 (not Q1); noted impact on procedure volumes and pricing | Continued pressures in MedTech; VBP and anticorruption remain major challenges | Ongoing headwind with no near-term easing |
Talc Litigation Progress | Q1 to Q3 updates on claimants’ support, settlement progress | Prepackaged bankruptcy plan moving forward; hearing set for Feb 2025 | Steady progress toward comprehensive resolution |
Orthopaedics Growth & Procedure Volumes | Persistent theme from Q1 to Q3, with backlog tailwinds early in 2024 | 2.5% growth, offset by transformation initiatives & China VBP; procedure volumes largely normalized | Modest growth post-backlog; normalization continues |
Vision Care Fluctuations (Inventory, New Products) | Q1 to Q3 references to U.S. distributor inventory issues and new lens launches | Inventory dynamics and new ACUVUE OASYS 1-Day boosted results; strategic pricing actions helped | Stabilized inventory, sustained growth |
Patent Litigation for INVEGA SUSTENNA | Mentioned in Q1 2024 regarding ongoing case status; absent in Q2/Q3 | No mention in Q4 2024 | No longer mentioned after Q1 |
RYBREVANT + Lazertinib in Frontline NSCLC | Highlighted Q1 to Q3 with strong data (MARIPOSA) and priority reviews | Significant survival benefit reported for advanced EGFR-mutated NSCLC | Continued positive momentum, major future driver |
ShockWave & Abiomed Acquisitions | Q1 to Q3 mention as strategic cardiovascular additions fueling MedTech growth | Abiomed +15% growth, ShockWave driving $564M; pipeline expansions continue | Ongoing synergy, expanding product lines and global footprint |
Price & Rebate Pressures (Pharma) | Addressed in Q2 regarding rising discounts and rebates; factored into longer-term guidance | No update in Q4 | Not referenced recently; remains an industry concern |
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Immunology and TREMFYA Growth Amid STELARA Biosimilars
Q: Will STELARA biosimilars impact TREMFYA's growth?
A: Management is confident TREMFYA will continue to grow despite STELARA facing biosimilar competition. They expect patients needing better therapies to switch to newer treatments like TREMFYA, which has strong differentiation in ulcerative colitis and an upcoming Crohn's launch. TREMFYA is the only dual-acting IL-23 agent in IBD, offering unrivaled flexibility with both subcutaneous and intravenous dosing options. They've invested appropriately in pricing to ensure patient access. -
Operating Margin Outlook
Q: How will margins improve despite lower sales growth?
A: Management anticipates a 150 basis point improvement in operating margins, resulting from focused investments and restructuring efforts. They've prioritized investments in core areas and optimized their corporate infrastructure following the consumer health business separation. They expect operating margin and EPS growth to align more closely with sales growth in 2026 and beyond. -
Intracellular Acquisition and Neuroscience Portfolio
Q: What does the Intracellular deal mean for neuroscience?
A: The company is excited about acquiring Intracellular and its product CAPLYTA. They expect CAPLYTA, used for schizophrenia and bipolar disorders, to become a $5 billion-plus asset, especially with anticipated approval for major depressive disorder later in the year. The acquisition complements their existing neuroscience portfolio without deprioritizing other assets, as depression requires multiple treatment options. -
MedTech Growth and EP Business Challenges
Q: What's the outlook for MedTech growth and EP issues?
A: Management expects MedTech end markets to grow 5–7% in 2025, with procedures normalizing to pre-COVID levels. They acknowledge short-term headwinds in electrophysiology due to a temporary U.S. pause of VARIPULSE cases while investigating reported neurovascular events. However, they remain confident in retaining their global market leadership in EP over the long term. -
Multiple Myeloma Franchise Performance
Q: How is the multiple myeloma franchise performing?
A: The franchise is experiencing strong growth, with DARZALEX achieving over $3 billion in quarterly sales—the company's first brand to do so. CARVYKTI is nearing a $1 billion year, with strong demand and capacity expansion. Their bispecific agents are performing well, and they're exploring combinations to bring these treatments into earlier lines of therapy. -
Medical Device Acquisition Strategy
Q: What's the strategy for MedTech acquisitions?
A: External innovation is crucial, focusing on smaller acquisitions to enhance the portfolio. Larger acquisitions like ShockWave and Intracellular are outliers. They highlight strong performance from Abiomed and Shockwave, progressing ahead of expectations and contributing to growth. -
MedTech Organic vs. Inorganic Growth
Q: How does organic investment compare to acquisitions in MedTech growth?
A: The company delivered 6.2% operational growth in MedTech in 2024, or 4.7% excluding the impact of the Shockwave acquisition. They're confident in achieving upper-end growth expectations, driven by new products and recent acquisitions. -
EP Revenue Recognition
Q: Any revenue reversals in EP numbers this quarter?
A: There were no revenue recognition reversals related to VARIPULSE in the quarter.
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