Johnson & Johnson stock skidded early Tuesday after light sales of blockbuster psoriasis treatment Stelara dragged the company's top line lower.
Stelara sales were flat at $2.45 billion, but came in 5% below expectations, Leerink Partners analyst David Risinger said in a report.
Under a series of deals, Stelara will face biosimilar competition in the U.S. beginning in 2025. J&J expects Stelara sales to come in flat this year amid new contract negotiations that could include price concessions, according to Reuters.
Johnson & Johnson stock toppled 2.1% to 144.45. The stock has been trending down this month and just hit its lowest point since November 2020.
Johnson & Johnson Stock: Sales Miss, But Profit Beats
Overall, J&J's adjusted earnings beat expectations at $2.71 per share. Earnings climbed 12.4% vs. the year-earlier period. But $21.38 billion in sales narrowly missed forecasts for $21.39 billion, according to FactSet.
Leerink's Risinger noted neuroscience and cardiovascular/metabolic sales missed projections, but sales within the pulmonary hypertension and oncology segments remained strong. Total pharma sales inched 1.1% ahead, on a strict, as-reported basis, to $13.56 billion.
Medtech sales jumped 4.5% to $7.82 billion. Evercore ISI analyst Vijay Kumar noted hip and knee surgeries looked strong, while electrophysiology sales grew 26%. Electrophysiology studies assess the heart's electrical system or activity to diagnose abnormal heart rhythm. The latter bodes well for rival Boston Scientific, he said in a report.
But "advanced surgery declines likely reflect share losses to Intuitive Surgical," he added. Advanced surgery sales came in 660 basis points below expectations and declined a fraction organically.
What's Next For J&J?
Johnson & Johnson slightly raised its guidance for the year. The company now expects to earn an adjusted $10.57 to $10.75 per share. The midpoint of J&J's outlook was slightly below Johnson & Johnson stock analysts' forecast for $10.66.
Sales are expected to come in at $88 billion to $88.4 billion. That was also light vs. predictions for $88.42 billion.
Paul Marino, chief revenue officer at GraniteShares, says J&J is struggling with its older businesses. But with the Shockwave Medical acquisition looming and a partnership with Nvidia, investors are looking forward to the future, he said in an email to Investor's Business Daily.
Johnson & Johnson stock is on the GraniteShares Nasdaq Select Disruptors exchange traded fund.
"So, while the legacy business may have some overhang, investors are more interested in how they are investing for the future and what these innovations could mean moving forward," he said.
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