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How JNJ’s Pharmaceuticals Segment Performed in 1Q17

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Pharmaceuticals

Johnson & Johnson’s (JNJ) Ppharmaceuticals segment includes products from various franchises: cardiovascular and metabolics, immunology, infectious disease, neuroscience, and oncology.

The above chart shows the segment’s revenues over the last few quarters.

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Cardiovascular and metabolics franchise

The cardiovascular and metabolics franchise includes key products such as Xarelto and Invokana. The franchise’s revenue fell ~7% to $1.5 billion in 1Q17, driven by the lower sales of Invokana, partially offset by increased sales of Xarelto.

Immunology franchise

The Immunology franchise includes key drugs such as Stelara, Simponi/Simponi Aria, and Remicade. The franchise’s revenue rose ~0.7% to $2.9 billion in 1Q17. The rise was driven by the strong performance of Stelara and Simponi/Simponi Aria, substantially offset by lower sales of Remicade due to competition from biosimilars.

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Infectious disease franchise

The infectious disease franchise includes products for the treatment of HIV and hepatitis C infections. The HIV portfolio includes Prezista, Prezcobix, and Odefsey. The hepatitis C portfolio includes Invico, Olysio, and Sovraid. The franchise’s revenue reported a 3.5% fall to $749 million, driven by lower sales of hepatitis C products, partially offset by the strong performances of Prezcobix and Odefsey.

Neuroscience franchise

The neuroscience franchise includes drugs Invega Sustenna, Concerta, and Xeplion. The franchise reported a 3.4% fall in its 1Q17 revenue to ~$1.5 billion. The lower sales of Invega and the divestiture of the Active Pharmaceuticals Ingredients business during 1Q17 drove the fall in revenue, and it was partially offset by a rise in Xeplion sales.

Oncology franchise

The oncology franchise includes drugs Zytiga, Imbruvica, and Darzalex. The franchise’s revenue rose 17.7% to $1.6 billion in 1Q17, driven by strong sales of Darzalex and Imbruvica and partially offset by lower Zytiga sales.

To divest risk, investors can consider ETFs such as the Vanguard Healthcare ETF (VHT), which holds 10.0% of its portfolio in Johnson & Johnson. The Vanguard Healthcare ETF also holds 6.1% of its total assets in Pfizer (PFE), 2.9% in Celgene (CELG), and 2.7% in Allergan (AGN).

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