Johnson & Johnson (NYSE: JNJ) reported impressive results for Q1, exceeding expectations in both revenue and profit. The strong performance from its pharmaceutical division, especially in the oncology segment, played a pivotal role in this success. Despite challenges posed by biosimilar competition and tariffs, J&J has raised its full-year revenue forecast, demonstrating confidence in its expanding drug lineup.

Q1 2025 Key Highlights

• Revenue: $21.89 billion (+2.4% YoY)

• Adjusted EPS: $2.77 (versus $2.59 estimate)

• Innovative Medicines Revenue: $13.87 billion (versus $13.43 billion estimate)

• MedTech Revenue: $8.02 billion (missed estimate of $8.17 billion)

Oncology Fuels Growth

J&J’s oncology portfolio remains a key driver of performance:

• Darzalex (multiple myeloma): $3.24 billion (+20% YoY)

• Carvykti (cell therapy): $369 million (exceeds estimate of $324 million)

• Total Oncology Drug Revenue: $5.68 billion (+18%)

This positive trend reflects strong demand, especially among treatments facing limited biosimilar threats.

Performance Variability in Other Segments

• Stelara (psoriasis): Sales down 33% to $1.63 billion, but still above estimates of $1.42 billion.

• MedTech Division: Although up 2.5% YoY, it fell short of expectations due to short-term softness, with improvements expected in H2 2025.

Updated Guidance

• FY Sales Forecast: Increased to $91.6 billion – $92.4 billion from $90.9 billion – $91.7 billion.

• Adjusted EPS Outlook: Adjusted down to $10.50 – $10.70 from $10.75 – $10.95.

Reasons for EPS Adjustment

• $14.6 billion acquisition of Intra-Cellular (developer of Caplyta for schizophrenia).

• Effects of Tariffs from the Trump Administration.

What to Monitor Moving Forward

• Biosimilar pressure on Stelara: Anticipate increasing U.S. market competition.

• Potential shifts in tariff policies may affect future earning capabilities.

• Integration of Intra-Cellular and Caplyta’s performance will be crucial in H2.

Conclusion

Overall, Johnson & Johnson’s robust Q1 results coupled with oncology strength offer promising insights. However, margin pressures and biosimilar risks indicate a need for cautious optimism. The upcoming H2 performance in MedTech and the integration of Caplyta are factors to keep an eye on.