Johnson & Johnson (NYSE:JNJ) may be involved in everything from hip implants to pharmaceuticals, but it’s the latter that brings in the majority of the profits and fuels any share movements. Don’t be duped into thinking that its complexity takes away from its success: Johnson & Johnson owned the fastest-growing top 10 pharmaceutical business in the United States, Europe, and Japan in 2012. To get a better idea of how it affects the company, let’s take a look at three things that will move Johnson & Johnson (NYSE:JNJ) stock in 2013.
1. Invokana launch and sales
The company recently launched its first type 2 diabetes treatment Invokana. The market for treatments may be saturated, but Invokana is a next-generation drug that has analysts and investors buzzing. It works by inhibiting the SGLT2 protein and has shown a smooth safety profile in clinical trials, although a study analyzing long-term safety is currently under way. The first-in-class treatment went head-to-head with the top dog in type 2 diabetes, Januvia from Merck & Co., Inc. (NYSE:MRK) , and beat it handily.
It is too early to call the fight, but Invokana’s initial launch will be aided by several market factors. Januvia sales regressed in the first quarter of 2013 for the first time in a very long time. Whether it was a new study linking DPP-4 inhibitors Januvia and Byetta from Bristol Myers Squibb Co. (NYSE:BMY) to an increased risk of pancreatitis or just an outlier period for inventory — as management insists — is unknown at this point. But it could aid Invokana’s reception with doctors who hold reservations about prescribing new therapies. Keep an eye out for its start out of the gates.
2. Expanded indication for Simponi
Simponi is one of the lucky, uber-successful drugs hailing from the class of TNF-alpha inhibitors. Sales in the first quarter of 2013 grew 104% over the year ago period to $237 million. That was only good for 10th in Johnson & Johnson (NYSE:JNJ)’s product portfolio and well below other successful TNF-alpha inhibitors, but growth and an expanded indication should help immensely. Already approved for moderate to severe rheumatoid arthritis, active psoriatic arthritis, and active ankylosing spondylitis, Simponi was recently approved for moderate to severe ulcerative colitis.
Broad use is extremely important for any drug. After all, market-leading TNF-alpha inhibitor Humira from AbbVie Inc (NYSE:ABBV) is approved for seven different indications. Simponi may get a stranglehold on the ulcerative colitis market, though, as it is the only drug in its class approved “to induce and maintain clinical response and improve endoscopic appearance of the mucosa during induction.” With 700,000 Americans affected by the disease, Johnson & Johnson (NYSE:JNJ) should have no problem capturing more sales.