Strong sales of anti-cancer drugs helped to alleviate the crisis of the "patent cliff". Johnson & Johnson's Q4 performance exceeded expectations.

Johnson & Johnson (JNJ.US) reported fourth-quarter earnings that exceeded Wall Street expectations, as strong sales of cancer drugs offset the declining demand for the company's popular psoriasis treatment. It is understood that Johnson & Johnson is facing a patent cliff of several billion dollars, as its second largest drug, Stelara, faces competition from generic drugs in the U.S. and Europe. The company is relying on new drugs, including its top-selling cancer drug Darzalex, to offset the decline in demand for psoriasis drugs. The data showed that the company's adjusted earnings per share were $2.04, including 22 cents related to the acquisition of medical device manufacturer V-Wave, a decrease of nearly 11% year-on-year, but exceeding analysts' expectations of $2.01. Revenue was $22.5 billion, an increase of 5.3% year-on-year, compared to analysts' expectations of $22.42 billion. After the financial report was released, the stock rose nearly 2% in pre-market trading on Wednesday. Johnson & Johnson stated that global sales of its cancer drugs increased by 19%, with Darzalex sales reaching $3.08 billion, an increase of over 20% year-on-year. Sales in the innovative medicine sector were $14.33 billion, while sales in the medical technology sector were $8.19 billion, representing increases of 4.4% and 6.7% respectively compared to the same period last year. Sales of Stelara declined by 14.7% to $2.35 billion, compared to analysts' expectations of $2.25 billion. Chief Financial Officer Joe Wolk stated in an interview that Darzalex remains a key pillar, and pointed out that the acquisition of Shockwave Medical for $1.31 billion has also helped drive growth. Johnson & Johnson stated that Shockwave's sales for the quarter were $2.58 billion, with annual sales totaling $5.64 billion. Earlier this month, Johnson & Johnson also agreed to pay nearly $15 billion to acquire Intra-Cellular Therapies Inc. (ITCI.US), a company that produces a drug approved for bipolar disorder. Wolk stated that the drug, called Caplyta, could be a "magic pill" and if proven effective for other neurological disorders, could generate annual sales of $5 billion. "We aim to be the leader in the neuroscience field," Wolk said, referring to Johnson & Johnson's approved treatment for severe depression, Spravato, and drugs in development for Alzheimer's disease and other related conditions. Looking forward to 2025, Johnson & Johnson expects sales to be between $90.9 billion and $91.7 billion, representing a year-on-year growth of 2.5% to 3.5%, with adjusted earnings per share between $10.75 and $10.95. The company is awaiting court approval of an $8 billion deal to settle thousands of claims related to talcum powder products. The final outcome may be announced this quarter, which will eliminate one of investors' long-term concerns about Johnson & Johnson's business. Additionally, Johnson & Johnson's three drugs, including Stelara, have been included in the first list of 10 drugs facing price negotiations with the U.S. government in 2026. None of the company's products are on the latest list of 15 drugs for price negotiations in 2027. Wolk stated that Johnson & Johnson did not join other peers in requesting the incoming Trump administration to pause price negotiations, and the company is "optimistic" about the future of the pharmaceutical industry under the leadership of Trump. He said, "I think when a pro-business, pro-innovation government wants to understand the dynamics of a particular industry, opportunities arise. We see a positive momentum in their desire to engage in dialogue."