Three Key Takeaways From Johnson & Johnson (JNJ)’s Q2

Page 1 of 2

Johnson & Johnson (NYSE:JNJ) reported its second quarter on Tuesday, and turned in some positive numbers. Revenue grew 8.5%, year-over-year, up to $17.9 billion. The EPS was higher than analyst estimates, and the company upped its full-year guidance.

Johnson & Johnson (NYSE:JNJ)

But the details are where things get interesting. Here are three key takeaways from the earnings report — and what they mean for Johnson & Johnson (NYSE:JNJ)’s future.

1. Infectious disease and oncology drove pharma growth

Total worldwide pharmaceuticals had a reported sales growth of 11.7% to $7.025 billion. Most of that growth came from infectious disease and oncology. Reported sales for these segments grew 23.1% and 51%, respectively.

Prostate cancer drug Zytiga was the oncology champion, growing 70.3% worldwide to $395 million. According to Johnson & Johnson (NYSE:JNJ), Zytiga now holds over 30% of the global market for metastatic castrate-resistant prostate cancer.

Zytiga received Food and Drug Administration approval in early 2011 for usage after chemotherapy. But the drug received approval late last year to become a first-line treatment. Zytiga’s second quarter growth was due to that expanded indication and the rollout of the drug into additional international markets.

The highest growth in the infectious disease segment belonged to the hepatitis C protease inhibitor Incivek, which grew 68.6% worldwide mostly due to additional international rollouts. That growth only equaled sales of $172 million for Johnson & Johnson (NYSE:JNJ) because Incivek is a partnered drug with Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) and Johnson & Johnson (NYSE:JNJ) is on the smaller side of that deal. Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX)’s first quarter report showed Incivek’s net product revenues at $206.5 million. But these protease inhibitors will likely lose substantial market share once the all-oral HCV drugs come to market.

The more interesting infectious disease story is HIV treatment Prezista, which had 16.6% worldwide growth to $435 million. Growth was fairly consistent between the U.S. and international, and this drug has been approved for over five years. So what we’re seeing here is organic growth caused by more patients adopting the drug.

2. Stagnant device growth will improve

Worldwide device growth was only 4% for the quarter, with most segments holding steady while diabetes device sales fell. But those figures aren’t including the recently finalized Syntes merger, which brings things up to a 48.9% worldwide growth.

Johnson & Johnson (NYSE:JNJ) shelled out $21.3 billion for Syntes back in 2011. Syntes is a market leader in trauma devices including bone grafts and plates. Johnson has now merged Syntes with its previously existing DePuy subsidiary.

Page 1 of 2
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The 10 Most Expensive Law Schools in the US

The 10 Best Wall Street Movies

The 10 Most Expensive Golf Clubs Ever Sold

The 10 Most Expensive Golf Memberships

The 10 Best Disney Characters Ever Created

The 8 Best Foods for Gaining Weight

The 10 Most Expensive Colleges in the World

The 7 Most Memorable Ad Campaigns of All Time

The 7 Most Expensive High Schools in the World

The 10 Electric Vehicles with the Longest Range

The 10 Cities with the Worst Drivers in the World

The 10 Most Expensive Dresses Ever Created

10 Islands to Visit Before You Die

10 Famous Celebrities Who Needed Rehab

The 15 Countries with the Largest Oil Reserves

The 10 Most Overused Excuses in the World

The 5 Best iOS Apps You Can’t Get on Android

5 Companies Damaged By Social Media Blunders

The 10 Most Legendary Blues Songs

The 10 Most Lawless Places in the World

4 Reasons China is a Threat to the US

The 17 Most Sugary Drinks in the World

The 10 Most Ruthless Rulers in History

The 10 Greatest Generals in History

Top 8 Travel Destinations for 2015

The 10 Safest Dog Breeds for Children

The 10 Most Stolen Vehicles in the US

The 7 Most Expensive Celebrity Weddings

The 10 Best LoL Teams in the World

Top 10 Worst Marketing Campaigns Ever Produced

Top 5 Diets that Help You Lose Weight

The 10 Best Ways to Stay Awake

7 Artists That Switched Musical Genres

The 10 Most Expensive Cities to Live in New Jersey

The 10 Best High Schools in New York

The 10 Countries With the Least Gender Inequality

The 6 Biggest Musician-Manager Feuds

The 10 Countries with the Cheapest Gas Prices

The 7 Most Theatrical Bands of All Time

The 8 Worst Band Breakups of All Time

The 10 Most Important South American Leaders

The 7 Most Successful Casting Show Winners

The 10 Most Peaceful Countries in the World

5 Big Reasons Communism Failed

The 15 Most Famous Carl Icahn Quotes

10 Scary Animals that are Actually Harmless

The 8 Most Famous Singer-Actors in Entertainment

The 10 Longest Wars of All Time

The 13 Worst Looking Foods that Taste Great

The 6 Most Gruesome Injuries Suffered During a Sports Match

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!