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How Are Johnson & Johnson’s Revenues Trending in 2019?


Jun. 25 2019, Published 7:45 a.m. ET

Revenue projections

In its first quarter earnings conference call, Johnson & Johnson (JNJ) forecasted a stronger operational revenue growth outlook and expects YoY adjusted operational sales growth of 2.5% to 3.5% and operational sales growth of 0.5% to 1.5% for fiscal 2019. The company has also guided for a YoY reported sales decline of 1.5% to 0.5% for fiscal 2019 based on the euro spot rate of $1.12. The company expects to offset the negative revenue impact due to foreign exchange fluctuations with robust operational performance. Wall Street analysts have forecasted the company’s fiscal 2019 revenues to be $81.22 billion, a YoY decline of 0.44%.

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Zytiga and Remicade challenges

According to the first-quarter earnings conference call, increasing generic erosion of Zytiga and Remicade and anticipated generic competition for Tracleer, Velcade, and Procrit are expected to be a drag on the company’s revenues in fiscal 2019.

On October 26, 2018, Johnson & Johnson announced a court ruling invalidating all claims of patent US 438 of its prostate cancer therapy, Zytiga. Being its first full quarter of facing generic competition, Zytiga’s worldwide sales dropped YoY by 15.4% on an operational basis and 19.6% on a reported basis to reach $679 million in the first quarter. The drug reported sales of $185 million in the US market, a dramatic YoY decline of 54.5%. According to the first quarter earnings conference call, the company expects the generic erosion rate for Zytiga to accelerate in coming quarters.

Zytiga continues to have patent exclusivity in ex-US markets. The drug reported $494 million revenues from international markets in the first quarter, a YoY rise of 12.9% on a reported basis and 20.9% on an operational basis. According to the first-quarter earnings conference call, this performance was driven by growth in overall demand for prostate cancer drugs as well as an increase in Zytiga’s market share in metastatic high-risk castration-sensitive prostate cancer indication in Europe and Asia.

Although Remicade accounted for 92% of the infliximab volume share, it continues to face pricing pressures and loss of market share due to biosimilar competition as well as competition from other classes of drugs. In the first quarter, immunology drug, Remicade reported worldwide revenues of $1.10 billion, a YoY decline of 20.6% on a reported basis and 19.1% on an operational basis.


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