Johnson & Johnson easily beat Wall Street's quarterly expectations Thursday, helped by its new cancer drug Carvykti, and JNJ stock roared higher.
Carvykti, a multiple myeloma treatment, brought in $117 million in sales, surging 388%. That beat expectations by 29%, Leerink Partners analyst David Risinger said in a report. Third Bridge analyst Lee Brown said "We're starting to see some nice momentum with Carvykti."
The company also raised its full-year guidance.
"The stronger performances by drugs that typically garner far less attention, as well as management's demonstrated confidence in the second-half projections, should be enough to keep investors comfortable, if not happy, with Johnson & Johnson's story," Brown said in a note to clients.
On today's stock market, JNJ stock jumped 6.1% to 168.38. Shares retook their 200-day moving average in bullish fashion for the first time since January, MarketSmith.com shows.
JNJ Stock: Pharma Drives Beat
In total, Johnson & Johnson earned an adjusted $2.80 per share on $25.53 billion in sales, jumping a respective 8.1% and 6.3%. Both measures topped forecasts, according to FactSet. JNJ stock analysts expected profit of $2.62 a share and $24.63 billion in sales.
Pharmaceutical sales delivered most of the upside, Third Bridge's Brown said. Overall sales rose 3.1% to $13.73 billion. Excluding the impact of Covid vaccine sales, the pharma division grew 6.2%.
Sales of inflammatory drug Stelara increased almost 8% to $2.8 billion, coming ahead of forecasts, Brown said. But revenue from inflammatory drug Tremfya and cancer treatment Erleada fell short of expectations at a respective $706 million and $567 million.
"The shortfalls relative to (analysts' forecasts) were more than offset by medications that typically do not garner as much attention such as HIV-1 drugs like Prezista and Endurant, which both delivered well ahead of expectations," Brown said. "Concerta for ADHD and Spravato for (depression) also drove strong upside and helped to push the segment ahead of (analysts' forecasts)."
Citeline analyst Zhyar Said also noted the strength from cancer drug Carvykti. Promising results from a recent study in June could further help boost Carvykti sales, he said in his note to clients.
"These results will provide a great foundation for further approvals in multiple myeloma, increasing revenue from the product," he said.
J&J Raises 2023 Outlook
In other businesses, medtech sales jumped 12.9% to $7.79 billion and consumer health sales grew 5.4% to $4.01 billion.
Highlighting the medical technology performance, sales of electrophysiology products rocketed "an impressive" 23.5% and topped Street calls by 8.6%, Third Bridge's Brown said. Electrophysiology is a means of studying the heart's electrical system to diagnose abnormal rhythm.
On the back of the strong quarterly report, Johnson & Johnson raised its outlook. The company now expects $10.70 to $10.80 per share in adjusted earnings and $98.8 billion to $99.8 billion in sales. JNJ stock analysts called for adjusted profit of $10.65 per share and $98.82 billion in sales.
Edward Jones analyst John Boylan says litigation uncertainty has weighed on shares recently. The company has entered a sweeping settlement with plaintiffs who say exposure to J&J's talcum-based baby powder caused them to develop cancer.
But jury trials are also ongoing. On Wednesday, a jury ruled J&J must pay a California man $18.8 million after he developed mesothelioma, according to NBC News. He claims repeated exposure to J&J's baby powder caused his disease.
"However, this should not overshadow Johnson & Johnson's other positive attributes such as its financial strength and diverse operations," Boylan said in a report.
JNJ stock is consolidating with a buy point at 183.35, according to MarketSmith.com.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
